New Zealand Institute of Economic Research (NZIER) Quarterly Survey of Business Opinion (QSBO) Sep 2024 Analysis

As the world’s top investment manager, it is crucial to stay ahead of the game and be informed about the latest economic developments. The recent NZIER QSBO for Sep 2024 has raised some important points that we need to pay attention to. Let’s dive deeper into the analysis provided by TDS FX analysts Prashant Newnaha and Alex Loo.

RBNZ Action Forecast

The analysts suggest that the Reserve Bank of New Zealand (RBNZ) needs to take more aggressive action in the coming months. They predict that there will be sequential cuts in the Overnight Cash Rate (OCR) in 2025. Here are some key points to consider:

  • Expect a 50bps cut in the OCR at the next Monetary Policy Review (MPR) meeting.
  • Change in call for the Nov Monetary Policy Statement (MPS) meeting from a 25bps cut to a 50bps cut.
  • Predict the OCR to hit 3% by the August meeting in 2025.

Bond Forecasts and Recommendations

When it comes to bond forecasts, the analysts maintain a cautious stance. Here are some important takeaways:

  • Limited changes to bond forecasts due to a prior bullish rates stance.
  • Anticipate limited scope for a significant rally in rates based on domestic factors.
  • Recommend trimming or closing long/received positions on strength.

It is essential to keep these forecasts and recommendations in mind when making investment decisions in the current economic climate.

Analysis and Implications

For those unfamiliar with financial jargon, let’s break down the significance of this information:

The RBNZ’s decision to cut the OCR indicates a shift towards a more accommodative monetary policy, aiming to stimulate economic growth. This could lead to lower borrowing costs for businesses and consumers, potentially boosting spending and investment.

On the other hand, the cautious approach to bond forecasts suggests that the market may not see a significant rise in interest rates in the near future. Investors should consider adjusting their bond portfolios accordingly to mitigate risks and capitalize on potential opportunities.

Overall, staying informed about these economic indicators and forecasts is crucial for making informed investment decisions and navigating the ever-changing financial landscape.

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