Analysts at ANZ are expecting an OCR cut by the RBNZ, even as the central bank has adopted a cautious, neutral tone but continues to signal eventual rate hikes.
“Market pricing will likely ebb and flow along with the data, particularly given volatility emanating from offshore at present. But ultimately, we expect that a more challenging domestic and global environment will eventually spur the RBNZ into action.”
“A lower OCR and a more cautious Fed are expected to cap long-end yields, but nonetheless we expect recent outperformance of the long end to subside somewhat. As the market prices a lower OCR, this will weigh on the NZD (along with a challenging backdrop for risk currencies). We expect NZD/USD to reach 0.61 by year end.”