Westpac on the RBNZ rate cut: Not surprised but surprised

Westpac's analysis on the Reserve Bank of New Zealand cash rate cut today

• "In one sense we are not surprised by today's cut ... But in another sense, we are slightly surprised"

Surprisingly, that makes sense; well it does to me.

Expectations were the RBNZ were going to cut, just not today.

Anyway, more from WPAC (in brief):

RBNZ signalling one further cut ahead (most likely in June)

Key reasons for the cut:

• Worsening international economic environment
• Recent fall in inflation expectations

In January ... the RBNZ Governor gave a speech cautioning against focussing excessively on headline inflation. The strong language in that speech seemed to pour water on the idea of an imminent OCR cut. We became very uncertain about the timing of cuts, but in the end felt it was more likely that the RBNZ would hold off before actually moving. Not so - the Reserve Bank instead chose to move immediately.