• Alan Bollard takes centre stage this week with Thursday’s OCR announcement, for which we expect the RBNZ to deliver a 50bp cut.
• Monetary conditions have tightened since the March MPS and a 50bp cut has a much better chance of nudging markets in the desired direction.
• Equally important will be the sort of actions the RBNZ takes to accompany a cut.  The best chance the RBNZ has to influence longer-term interest rate expectations is to combine a rate cut with an explicit commitment to keep the OCR at or below its new level for a defined period.

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