Wednesday, 1st May, 2019

Domestically, things were quiet last week, with the Easter and ANZAC day holidays there were few local data announcements. It’s just as well we had a breather, as things will kick into gear again this week. With March business confidence out tomorrow and Q1 employment on Wednesday, the RBNZ will have two more pieces of data to examine ahead of its meeting next week. We expect 25bps in cuts, and will have a preview out later in the week.

Friday saw the release of NZ’s March trade balance, showing a much larger surplus than expected. Our strong export sector remains a support for the economy, despite soft global growth and slowing international trade flows.

Internationally, the Bank of Canada, Bank of Japan and Swedish Riksbank held meetings, where all three emphasised rates will remain low for some time to come. A weak CPI print in Australia suggests the RBA could move to an easing bias next week. Thus, we continue to see evidence of a trend toward greater central bank dovishness globally, as well as domestically. US GDP growth outpaced expectations ahead of this week’s Fed’s meeting on Wednesday.