The previous communucations from the rbnzz Reserve Bank of New Zealand were that rates were likely likely to go up or down
That is, the Bank had a neutral outlook.
Not anymore …
- Given the weaker global economic outlook and reduced momentum in domestic spending, the more likely direction of our next OCR move is down.
NZD was sent lower immediately and as I update is showing nigh on zero bounce:
The switch to dovish by the bank has caught some by surprise, especially NZD longs of course.
The circumstances outlined in the brief statement issued by the RBNZ (linked here) accompanying today's decision are applicable (to varying extents) to Australia also …. weaker domestic demand, weaker overseas growth, core inflation under target ….
AUD has been trashed alongside the NZD.
