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Analysts at ANZ expect that the global environment will remain supportive for New Zealand, but global shocks have the potential to change the economic landscape and the outlook for the OCR very rapidly.

Key Quotes

“Arguably the most important global risk for New Zealand at present is the possibility that China slows more sharply than currently expected. Trade tensions are adding pressure. Weakness in Australia’s housing market has not affected lending in New Zealand, but could if the adjustment were to become particularly pronounced. Abrupt tightening in global liquidity could also see financial conditions tighten.”

“New Zealand is isolated from the direct effects of Brexit and Italy’s political saga, but developments could nonetheless contribute to market wobbles, including in currency markets.”