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10 Sep 2015
RBNZ might cut again as early as October - UBS
FXStreet (Córdoba) - Following Reserve Bank of New Zealand decision to cut rates for third time in a row, the UBS analyst team commented they see greater risks of a further 25 bp cut, potentially as early as October.
Key Quotes
“The slowdown in China and weak commodity prices continue to weigh on growth expectations for both Australia and New Zealand”.
“Today, the Reserve Bank of New Zealand (RBNZ), as widely anticipated, cut the cash rate again by 25 bps to 2.75% (totaling 75 bps so far). Its statement made crystal clear that more easing is likely. Despite a material decline already, the RBNZ still maintains that ‘further depreciation is appropriate’ for the NZD, although no longer ‘necessary’.”
“This is a clear toning down of its rhetoric on the easing bias and NZD, counterbalanced by a deterioration in the GDP outlook since the June Monetary Policy Statement”.
“While the cash rate is now at our cycle low point of 2.75%, we see greater risks of a further 25 bp cut, potentially as early as October”.
Key Quotes
“The slowdown in China and weak commodity prices continue to weigh on growth expectations for both Australia and New Zealand”.
“Today, the Reserve Bank of New Zealand (RBNZ), as widely anticipated, cut the cash rate again by 25 bps to 2.75% (totaling 75 bps so far). Its statement made crystal clear that more easing is likely. Despite a material decline already, the RBNZ still maintains that ‘further depreciation is appropriate’ for the NZD, although no longer ‘necessary’.”
“This is a clear toning down of its rhetoric on the easing bias and NZD, counterbalanced by a deterioration in the GDP outlook since the June Monetary Policy Statement”.
“While the cash rate is now at our cycle low point of 2.75%, we see greater risks of a further 25 bp cut, potentially as early as October”.