Thursday, 4th April, 2019

In a dovish surprise, the Reserve Bank (RBNZ) moved last week to a clear easing bias. On the basis of this change in RBNZ rhetoric, we also moved to forecast OCR cuts in August and November (see the Chart of the Week and Page 2 for more discussion). Meanwhile, Brexit machinations dominated offshore markets last week. But one week on and it appears the Brits are no closer to a Brexit resolution.

This week, The RBA chimes in with its interest rate announcement. Market pricing suggests that the RBA could join the RBNZ and offshore brethren in moving to an easing bias. The local highlight is the Quarterly Survey of Business Opinion. On the business sentiment front, we are wary of a further fall from already-weak levels. If sentiment does prove weak, then this will reinforce our view that economic growth is likely to remain soft in Q1.