I had this on Tuesday but am only posting it now.
Yes, it would have been much more helpful for me to post it yesterday. I have no excuse. But … if I did it was that I was snowed under by the news from those scoundrels in China!
This is via KiwiBank in New Zealand, looking for further and faster Reserve Bank of New Zealand rate cuts. In summary:
- The Kiwi economy has (under)performed largely in line with our forecasts. And the RBNZ has kicked off.
- We expected the Kiwi to be closer to 57c, given the data released. But it’s not even close, at 62c.
- The USD has weakened, falling about 4.5% in two months. It’s hard for the Kiwi to fall against a falling dollar.
- The RBNZ has been leapfrogged by the Fed. Although the RBNZ started cutting a little earlier, the Fed has cut by a little more. The Fed kicked off their cutting cycle with a bold and beautiful 50bps move. And they’ve outdone the RBNZ.
- We think 50bp moves will be on the table when the RBNZ deliberates in October and November. We’d need to see at least one 50bp move to match market pricing and see a fall in the Kiwi.
- We still forecast relative underperformance in the Kiwi economy, eventually leading to a lower currency. But we’ve recalibrated our call to 59c from 57c.
NZD daily candles: