HALISTER1: Kiwi May Reach 0.58 in a Year, RBNZ Seen Cutting Rate: Redward

Kiwi May Reach 0.58 in a Year, RBNZ Seen Cutting Rate: Redward

(Bloomberg) -- It’s time to re-enter short exposure to NZD/USD, as further monetary accommodation will be required this year, Peter Redward, principal at Redward Associates, says in an interview.
  • RBNZ could cut interest rate to 1.75%: Redward
  • There is scant evidence that rising house prices are a threat to the inflation target
    • Peak dis-inflationary impulse from falling energy prices is “now behind us” but inflation remains well below target for a 7th year (excluding GST effects)
  • RBNZ may further tighten macro-prudential measures to ensure financial stability
  • Dairy farmers will post more losses in 2016/17 while credit expansion and falling collateral values are now showing up in rising impairments
  • NZD/USD up 0.1% to 0.6886
  • NOTE: RBNZ next meet on June 9 to set monetary policy; cash rate left at 2.25% last week
  • NOTE: Redward also suggests receiving kiwi 5y5y interest- rate swaps, now at 3.4714%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Peter Redward (Redward Associates Ltd)

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