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(Z1) Neutral at Higher Levels




Italy Upgraded At Fitch, Affirmations Elsewhere


Coming up in the Asia-Pac session on Monday:

RBNZ: VIEW: ANZ note that "the RBNZ left the OCR and QE cap unchanged today, as
expected. The text of the Review emphasised that despite some positive near-term
developments, "significant economic challenges remain" and risks remain skewed
firmly to the downside. The RBNZ reminded markets that they have further tricks
up their sleeve if required, and said "we will outline the outlook for the LSAP
programme and our readiness to deploy alternative monetary policy tools in our
August Statement". We continue to expect the RBNZ LSAP program to be further
expanded to a cap of NZ$90bn by August, in a pre-emptive move...The higher
exchange rate got an explicit mention, but this was framed as a headwind for the
economy, as opposed to a development the RBNZ was actively looking to lean
against just yet. The RBNZ would no doubt prefer a lower exchange rate, but it's
not clear that the NZD should be lower given how well placed New Zealand is
relative to other countries. However, reiterating that foreign asset purchase
remain an option at the table suggest there is less tolerance for further
appreciation from here."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |