Reserve bank says “no” to rate cut

In the past week, New Zealand’s financial markets have been primarily influenced by global events, with little guidance provided by local data.

Markets continue to anticipate that the Reserve Bank of New Zealand will skip a cut at the next meeting on July 9 and then cut rates again in August.

The RBNZ has already aggressively slashed the cash rate by 2.25%.

However, growth remains weak, with Q1’s strong performance largely driven by net exports.

Inflation has been demolished.

Along with wage growth, which will continue to be crushed by strong immigration of cheap foreign labour.

I can’t see why the RBNZ should not cut again, notably so given house prices have barely gotten off the canvas.