• Last Thursday the RBNZ left the cash rate unchanged at 2.5%, as expected.  However, the accompanying statement was deliberately dovish, designed to try hose down market expectations of rate hikes.
• The strategy worked for the RBNZ, with market pricing pared back sharply, now more in line with our own expectation that the RBNZ will start hiking around April 2010.
• The NZ dollar dropped sharply against all the major crosses over the week, as the marked pared back expectations on NZ and Australian cash rates and offshore sentiment turned soar.

Read the full PDF report.

In order to read these documents you will need to have Adobe Acrobat Reader. If you do not have this software installed on your computer, please click on the Adobe link below to download it. (The software is free of charge).