Market Musing, Asia Pacific

The NZD’s revival against the AUD, which washed through from end-July to mid-September on the back of stronger dairy prices (NZ’s major export) at the start of the new season and concerns about China’s property sector, looks to have run its course (chart 1). Fundamentals are swinging back in favour of the AUD, and in line with our long-held view, we think these underlying trends could persist over the medium-term. Externally, policymakers in China have been stepping up to the plate recently to bolster ‘animal spirits’ across spending and investment and boost growth. Various monetary and housing support measures have...

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:...