HALISTER1: N.Z. Phillips Curve Is Flat, Hold OIS Receiver on RBNZ Cuts: CBA

N.Z. Phillips Curve Is Flat, Hold OIS Receiver on RBNZ Cuts: CBA

(Bloomberg) -- New Zealand’s Phillips curve is “as flat as a pancake” as with most countries, Jarrod Kerr and Adam Donaldson, CBA rates strategists, write in note today.
  • Maintains NZD Aug. overnight-index-swap receiver and continues to see “good” chance RBNZ cuts policy rate to 1.50% in current cycle from 2.25% currently
  • Also expects RBA to lower rate to 1.25%, possibly 1.00% this year, from 1.75%
  • Extends target for AUD August OIS receiver to 1.25% from 1.50% previously
  • NOTE: Phillips curve refers to inverse relationship between unemployment and inflation
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Adam Donaldson (Commonwealth Bank of Australia)
Jarrod Kerr (Commonwealth Bank of Australia)

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