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BONDS: NZGBS: Richer After RBNZ Decision To Cut 50bps

BONDS
BulletMarketsFixed Income Bullets

NZGBs are 3bps richer after the RBNZ Policy Decision. 

  • The RBNZ’s MPC cut the cash rate by 50bp to 3.75% as was unanimously forecast. This brings cumulative easing to 175bp. Updated staff forecasts have also been published.
  • “If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025. The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR."
  • "With spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment. "
  • "Consumer price inflation in New Zealand is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. The net effect of future changes in trade policy on inflation in New Zealand is currently unclear."
  • Swap rates are 4-5bps lower after the decision.
  • RBNZ dated OIS pricing is little changed after the decision. 49bps of easing had been priced today, with a cumulative 115bps by November 2025.
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NZGBs are 3bps richer after the RBNZ Policy Decision. 

  • The RBNZ’s MPC cut the cash rate by 50bp to 3.75% as was unanimously forecast. This brings cumulative easing to 175bp. Updated staff forecasts have also been published.
  • “If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025. The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR."
  • "With spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment. "
  • "Consumer price inflation in New Zealand is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. The net effect of future changes in trade policy on inflation in New Zealand is currently unclear."
  • Swap rates are 4-5bps lower after the decision.
  • RBNZ dated OIS pricing is little changed after the decision. 49bps of easing had been priced today, with a cumulative 115bps by November 2025.