Dominick Stephens, the chief economist at Westpac, notes that the Reserve Bank of New Zealand (RBNZ) has made an unprecedented decision to cut the official cash rate (OCR) 50 bps in a nonemergency situation today.

• “There was no signal of imminent further cuts, so we doubt the RBNZ will move again in September.
• But the new MPC has shown its willingness to react to adverse economic news, and the current downturn is likely to get worse before it gets better.
• Therefore, we now expect the RBNZ to cut the OCR to 0.75% in November.
• The consequence of this will be a housing market upturn.
• We were already forecasting 7% house price inflation next year, and the risk to that call is now to the upside.”