Market Musing, Asia Pacific

Another one bites the dust with the Reserve Bank of New Zealand today joining the likes of the Bank of Canada, the European Central Bank, and the Bank of England in kick starting its monetary policy easing cycle. The RBNZ delivered a 25bp reduction, lowering the official cash rate to 5.25%. The RBNZ went hard and early during the interest rate hiking phase, and the negative impacts from 15-months of very ‘restrictive’ settings are being felt across the NZ economy. The previously reluctant RBNZ has (finally) seen the light, something we believed was a matter of time (see Market Musings:...

No change in policy from the RBNZ at today’s meeting, as widely expected. And given this was an interim review meeting, not a full forecast update, there was another fairly short post meeting statement. That said, we think were noteworthy tweaks in the RBNZ’s tone and guidance. After leading the central bank charge during the global tightening phase and maintaining a ‘hawkish’ bias for some time, the RBNZ has started to soften its message as the harsher NZ economic reality appears to be hitting home. This is no surprise to us as we never bought into the RBNZ’s surprisingly ‘hawkish’...