From Sean Callow at Westpac in Sydney on the Reserve Bank of New Zealand:

Our economists in Auckland say that the RBNZ may not expect to cut the OCR, but they have said they stand ready to cut if circumstances change.

We think the RBNZ will indeed be surprised on the downside by inflation, GDP growth, and house prices and consequently, we remain steadfast in our view that the OCR will fall to 2.0% next year.


Today's rate cut by the RBNZ took the cash rate from 2.75% to 2.5%. So Callow is saying the RBNZ will cut again twice (2*25bp) in 2016 (Actually, that 2*25 is my assumption, maybe he is thinking 1*50 .... I don't think so but just mentioning it).



AUD/USD ... Support around 0.7160/70 should hold near term, with the US dollar on the back foot, commodities a little steadier and limited danger from Australia's jobs data.