- 23 of 25 economists forecast a 25 bps rate cut in October next
- Of the remaining two, one anticipates a 50 bps rate cut and the other no change
- 23 of 25 economists forecast the RBNZ to cut by at least 50 bps to 4.75% by year-end
- The remaining two expect the cash rate to be cut to 5.00% i.e. one more rate cut only
For some context, the previous consensus before the rate cut this week was that the cash rate will be at 5.00% by year-end. So, this mainly just takes into account the rate cut on Wednesday.
Also, only one of the largest banks in New Zealand did correctly anticipate a rate cut for this week; that being ASB. But now, all of them (ANZ, ASB, Kiwi Bank, BNZ, Westpac) are seeing 50 bps of rate cuts in Q4.
As a reminder, the RBNZ has only two more meetings left for the year. The first being on 9 October and the other on 27 November. That said, traders are currently pricing in ~78 bps of rate cuts for the two meetings.
This article was written by Justin Low at www.forexlive.com.
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