RBNZ to keep cutting in May – ING

Another 25bp rate cut by the Reserve Bank of New Zealand on 28 May seems likely. Markets are fully pricing it in, following the RBNZ’s previous indications that growth remains a major concern, ING’s FX analysts Francesco Pesole and Chris Turner note.

US-China trade tensions can drive AUD/NZD to 1.10-1.11

“However, market pricing for two additional cuts after May looks a little too dovish given non-tradable inflation remained elevated at 4% and the unemployment rate flattened at 5.1% in the first quarter.”

“The Kiwi dollar should keep acting as a lower-beta version of AUD to trade news. Further de-escalation in US-China trade tensions can drive AUD/NZD back to the 1.10-1.11 area where it traded at the start of this year.”