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Speaker 1: Remy Morgan Milf from Milford is here.

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Speaker 2: Hey Remy, Hi Ryan, how's it going.

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Speaker 1: You have a really good thank you thanks for being

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Speaker 1: on the show with us. How did the market three?

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Speaker 1: Obviously a lot to do yesterday We've had company results,

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Speaker 1: but we're the main thing, of course, was the RBNZ.

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Speaker 1: How did the market react?

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Speaker 2: Yeah, so today's Reserve Bank meeting that was the first

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Speaker 2: since November last year, given we've had the summer holiday

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Speaker 2: and the fifty basis point cut today was largely expected

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Speaker 2: and almost fully priced in. So what was actually more

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Speaker 2: interest was the rbn zaid forward track. So this was

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Speaker 2: revised down little, implying that the rate cuts will come

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Speaker 2: in slightly quicker than what was previously expected by the

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Speaker 2: rbn Z. So their track is now forecasting two twenty

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Speaker 2: five basis point cuts by July this year and a

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Speaker 2: cache erate of around three point one percent by the

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Speaker 2: end of the year, which is down from three point

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Speaker 2: five to five percent previously. Now that's actually a lot

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Speaker 2: more closely aligned to what the market had already been

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Speaker 2: pricing in going into the meeting. Because of that, the

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Speaker 2: market reaction was pretty subdued and there was really no

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Speaker 2: major or unexpected moves to call out. The next meeting

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Speaker 2: is on the ninth of April, and another twenty five

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Speaker 2: bases point cut is essentially fully priced by the market,

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Speaker 2: but what actually happens will depend on the data and

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Speaker 2: what unfolds between now and then.

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Speaker 1: Remy, if we think about what's happening in the US,

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Speaker 1: obviously there's a lot of uncertainty to what extent that

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Speaker 1: influenced the Reserve Bank's decision today.

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Speaker 2: Yeah, that's a good question. So the US Federal Reserve

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Speaker 2: is currently on pores with its interest rate easing cycle,

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Speaker 2: and this was something that the RBNZ did discuss, as

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Speaker 2: the market is now pricing in less cuts in the

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Speaker 2: US than back at the time of their meeting in November,

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Speaker 2: and this has implications for the currency. We've already seen

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Speaker 2: the New Zealand dollar quite a bit weaker against the

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Speaker 2: US since November. There's also quite a lot of uncertainty

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Speaker 2: around the US tariffs, and the RBNZ also discuss these risks. Now,

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Speaker 2: the impact of trade restrictions really remains quite uncertain, but

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Speaker 2: it might be something that needs to be factored into

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Speaker 2: future monetary policy responses. Now, these things can take a

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Speaker 2: bit of time to play out, and we'll see the

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Speaker 2: z RB and z respond accordingly.

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Speaker 1: We also had the Reserve Bank of Australia use today.

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Speaker 1: How does this contrast with what's happening here in New Zealand.

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Speaker 2: Yes, so yesterday the RBA finally cut its policy rate,

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Speaker 2: but only by twenty five basis points to four point

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Speaker 2: one percent. Now, this was its first cut to this cycle. Now,

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Speaker 2: as we know in New Zealand, we've already been cutting

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Speaker 2: since August last year and from a much higher peak

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Speaker 2: cash rate of five point five percent. And the tone

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Speaker 2: of the RBA implied that there could be a slower

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Speaker 2: pace of rate cuts from here than what the market

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Speaker 2: was pricing, which obviously compares to a slightly faster pace

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Speaker 2: now expected by the rbn Z in New Zealand. Another

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Speaker 2: key difference is that in Australia, the lays the market

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Speaker 2: remains much tighter, and the RBA actually revised down its

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Speaker 2: peak unemployment forecast to four point two percent, which compares

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Speaker 2: to the expectation of five point two percent peak unemployment

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Speaker 2: in New Zealand. So I think based on the current data,

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Speaker 2: it's fair to say that we could see some continued

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Speaker 2: divergence between the easing cycle in New Zealand and Australia,

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Speaker 2: but again this remains data dependent.

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Speaker 1: Certainly sounds like it, Remy, Thank you very much for that.

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Speaker 1: That's Remy Morgan from Milford Asset Management. For more from

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