SHARE THIS New Zealand’s Official Cash Rate and short-term interest rates may stay elevated in 2023 but longer-term interest rates are likely to decline starting in the second half of the year as financial markets begin pricing in the possibility of...
SHARE THIS In an encouraging sign for New Zealand, the Reserve Bank of New Zealand (RBNZ) signalled in May that the Official Cash Rate is likely to have peaked at its current level of 5.5%. The RBNZ appears to have shifted its focus from inflationary...
SHARE THIS Although the arrival of a new year has brought some optimism after a tough 2024, economic activity remains subdued in New Zealand. The Reserve Bank of New Zealand may further cut interest rates in 2025 with global uncertainties impacting the...
SHARE THIS With the global outbreak of COVID-19 in the first half of 2020, the world was turned upside down. Under such circumstances, Japanese companies are now faced with new challenges to adapt to this “new normal”.
SHARE THIS New Zealand bonds went through a tough period in August. The rough patch reflects continuing uncertainty, with the bond market undecided about whether it should focus on inflation itself or pay more specific attention to the measures that...
SHARE THIS The Reserve Bank of New Zealand’s rate cut in August appears to constitute a slight easing of the brakes rather than a large change. With the Official Cash Rate at 5.25%, conditions are still restrictive. The first signs of recovery are...
SHARE THIS Given the current weakness in New Zealand’s economy, the key question regarding interest rates is not so much the direction they will take but when they are likely to be cut. The struggles seen in the economy span from GDP to employment and...
SHARE THIS The equity market reaction to New Zealand’s second COVID-19 lockdown has been far more muted than the first time similar restrictions were imposed. The first lockdown from March 2020 caused an aggressive sell-off as investors and companies...
SHARE THIS The New Zealand stock market has been flat in the calendar year to date, with companies working to adapt to a number of risk factors. This puts it in stark contrast with markets in the rest of the developed world, which have seen gains...
SHARE THIS New Zealand's fixed income market has struggled so far in 2024 and inflation has remained high. However, there is growing confidence that the Reserve Bank of New Zealand will lower the Official Cash Rate in the next six to 18 months due to a...
SHARE THIS We believe that the recent rise in New Zealand’s interest rates has put the bond market in a good place, as the alternative may have been a negative interest rate regime instead. Without higher interest rates the government would have found...
SHARE THIS Although New Zealand’s November 2022 rate hike was larger than expected, markets had been pricing in aggressive tightening for quite some time. This may soften the impact of the current challenges. Given that yields on some bonds are now...
SHARE THIS We view 2024 with optimism—markets could begin to be driven by company earnings rather than by inflation outcomes and interest rate expectations as they have in the past year, and New Zealand’s market is well placed to shrug off volatility...
SHARE THIS Despite continued struggles with inflation in New Zealand and elsewhere, our view is that the RBNZ’s next change to the OCR is likely to be downward, albeit at a later timing than the market has recently been expecting.
SHARE THIS New Zealand’s equity market is currently facing challenging times. However, a sense that the country’s interest rates may have peaked are some of the indications that the market’s outlook may brighten.
SHARE THIS New Zealand’s bond market performed well overall in July, although the long term sector outperformed its short term peers significantly.
SHARE THIS We think the New Zealand bond market looks very attractive relative to the rest of the world given how high our interest rates are. At the same time, we certainty aren’t immune to developments in the rest of the world, particularly the US,...
SHARE THIS Amid significantly negative returns in both the equity and fixed income markets at the end of last year, it was thought that 2023 would be the “year of the bond”. As we near the end of 2023, however, the bond market is still yet to live up...
SHARE THIS As New Zealand grapples with inflation and the spectre of a recession, we highlight the impact increasing mortgage rates may have on consumer spending. This is an important theme as it ties in with how we need to consider absolute interest...
SHARE THIS The Reserve Bank of New Zealand’s decision to have the Official Cash Rate (OCR) peak at 5.5% surprised the market, which had started to price in a peak of 5.75% or 6.0%. The lower-than-expected peak in the OCR is positive for equities as...
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