Cross-Check: AUD/NZD – Diverging trends
As was universally expected the Reserve Bank of New Zealand kept its Official Cash Rate at 5.5% at today’s meeting. This is the first time the RBNZ has not raised the OCR since the August 2021 meeting. The RBNZ went early and hard, delivering an eye-watering 525bps worth of rate hikes between October 2021 and May 2023. As a result, policy settings in NZ are well into ‘restrictive’ territory (i.e. above the estimated equilibrium ‘neutral’ rate). From our perspective, the underlying message from the RBNZ and developments across the NZ economy suggest that without another positive inflation shock the move...