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According to analysts at ANZ, the New Zealand economy has a little less wind in her sails and it’s now been confirmed in the hard data; and the view from the crow’s nest is that there’s a little more softening to come.

Key Quotes

“While it’s our expectation that growth will stabilise and begin to recover gradually in early 2020, this is contingent on a couple of key economic drivers holding steady as the swell continues to pick up. And with the RBNZ expected to use up all of its conventional fuel just keeping the ship on course, we’re only one storm away from being blown into the uncharted territory of unconventional monetary policy.”

“Let’s hope the Government can see the darkening clouds on the horizon and is readying its fleet to lend a hand if the SOS goes from monetary policy needing friends to New Zealanders’ wellbeing needing a lifebuoy.”

“The RBNZ’s surprise 50bp cut in August was a major talking point for the market over the quarter. Meanwhile, the Federal Reserve maintained an easing bias, and cut its policy rate by a further 25bp and the RBA, too, felt the need to ease policy, with its latest cut reigniting talks of unconventional monetary policy on both sides of the Tasman. NZ yields hit fresh lows as the global data pulse deteriorated, with the September 2025 inflation-indexed bond becoming the first NZD-denominated asset to yield a negative interest rate.”

“We expect the slowdown in global and domestic activity to continue to weigh on the NZD over coming quarters, and expect the global easing cycle to continue to drag yields lower.”