📝Expect A Follow-Up 25Bps RBNZ Rate Cut In November: ANZ

RBNZ cut the Official Cash Rate (OCR) 50bp to 2.50% today, with balanced messaging that left open the option of a pause, a 25bp or a 50bp cut at the next meeting in November, depending on how the data evolves. Overall, it can best be characterised as front-loading the easing they forecast back in August, rather than signalling strongly that they believe they will need to do more.

We are forecasting a follow-up 25bp cut in November taking the OCR to 2.25%, with that to mark the end of the easing cycle. We see risks on both sides of that. If the data continues to disappoint, another 50bp cut is possible. But it’s entirely possible that activity data will start to surprise to the upside from here – the bar for that is low. - ANZ