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Assertive RBNZ may finally take froth off overheating house prices
by Cathryn Hughes - Wednesday, 20 July 2016, 4:17 PM


We believe the Reserve Bank's announcement yesterday to further constrain bank lending to property investors is material.  It signals a much more assertive approach to the risks they believe mortgage lending creates within the banking sector.  In our view, the announcement helps cement expectations for further cuts in the Official Cash Rate, and opens the way for a more substantial fall in the NZ Dollar.  read more....



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Avoiding a housing crisis or banking crisis?
by Cathryn Hughes - Friday, 15 July 2016, 1:22 PM


Once again there is a feeling that the RBNZ has become embattled.  If it isn't bank economists confused about their OCR decisions, it's politicians openly applying pressure to take action with new macro-prudential tools.  In our view, the RBNZ could more clearly set out that they are using macro-prudential tools to avoid a banking crisis, not to address a housing affordability crisis or to give themselves more room with monetary policy.          read more,,,,,,,,





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NZD/AUD potential moves towards parity, but fundamentals anchored lower
by Cathryn Hughes - Tuesday, 12 July 2016, 9:11 AM


The market and economic backdrop for the NZDAUD has changed noticeably since the RBNZ last cut interest rates in March.

The NZDAUD cross has moved to the upper end of its historic trading range.  Although there may be short term momentum to the upside, economic fundamentals point towards a lower NZDAUD over the medium term.  

In the last week we saw the AUD weaken read more........