From Morgan Stanley on the Reserve Bank of New Zealand:

  • RBNZ's "first move to be a 25bp cut in 4Q15, as inflation expectations remain subdued and major trading partners' central banks continue to ease monetary policy"

But ...

  • the NZ central bank is "to fully reverse the cut and more during 2016 as the world transitions from a low inflationary to reflationary environment, while the Fed embarks on its tightening cycle"
  • policy tightening "to resume in 2Q16 at a measured pace of 25bp per quarter"

On the NZD:

  • Stays in a range this coming quarter
  • then "falling more sharply" in Q4
  • Have a year-end forecast of $0.63

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ps. MS economists in the US see a Fed rate hike in December this year