According to analysts at ANZ, in contrast to the RBA’s wait-and-see stance, yesterday the RBNZ delivered an OCR cut, but stopped short of promising further aggressive action.

“Our NZ colleagues have long argued that the RBNZ would cut the OCR, but as it turns out they took the plunge a little earlier than we anticipated. The bank’s OCR projection implies a 50% chance of an additional cut sometime next year, indicating the Bank is prepared to respond should economic outturns disappoint their expectations. And disappoint we think they will. Lower interest rates will support growth, but we don’t think a single 25bp cut will completely alleviate the headwinds the economy is facing at present. We expect that by November it will be evident that further cuts are required and that the Bank will deliver.”