The Reserve Bank of New Zealand left the cash rate unchanged at 2.25%

That was an 'as expected' decision.

Analyst responses are coming in now, outlooks etc.

ASB:

  • Expect a cut in June to 2%
  • Expect another cut in August
  • ASB citing risks that inflation falls further
  • See the RBNZ taking action (macroprudential policy) on the housing market if they cut further

Westpac:

  • RBNZ guidance did not clearly signal the next cut would be in June
  • The bank retains its easing bias
  • The bank only slightly strengthened its NZD exchange rate warning

On the NZD response, WPAC says: NZD/USD jumped from 0.6845 to 0.6925 - a larger positive response than the 1/2c we had predicted. This is probably due to recent speculative short positioning being rebalanced. AUD/NZD fell from 1.1080 to 1.0955 and could run further, particularly given the AU CPI shock.

ANZ:

  • Keeps the prospect of further easing in June alive

more to come