RBNZ cuts
No messing around from the Reserve Bank in New Zealand, as it cut interest rates to a fresh low today.
The RBNZ Governor remarked that he didn't see the point in waiting for deteriorating data, and made a decisive move.
The channels for monetary policy transmission are a bit different in New Zealand as most borrowers are on fixed rate mortgages (though most are short term fixes, and as such are usually only 12-18 months from a refinancing event).
Markets now see the Reserve Bank in Australia cutting the cash rate twice further by next year to 1 per cent.
The SOMP is due to be released at the end of the week and may shed further light on growth and inflation forecasts.
