Inflation below bottom of RBNZ target band
Kiwibank's chief economist Jarrod Kerr has weighed in with his thoughts after the NZ CPI data today:
- The RBNZ isn't going to lift interest rates in the next year, so a hedge of long-term interest rate risk exposure is good now, with expectations low
- favors paying 5 year interest rate swaps
- forecasts NZDUSD at 0.70 by year-end and around 0.67 in 2019. The NZDUSD is trading at 0.7319 currently
- Expects AUDNZD to take a few by surprise on its way to 1.08 and possibly 1.10. The AUDNZD is trading at 1.0642
