RBNZ turns dovish

By Alex Moffat. Published at Mar 29, 2019, in Market Wrap

The British Chamber of Commerce has fired a shot at the Parliament saying, “No-one would run a business like this – and it is no way to run a country”.

The BBC is reporting that Parliament will vote today on the withdrawal agreement only.

I popped out for a sandwich with one of my favourite fund managers on Wednesday and upon returning to the coalface noticed our three year government bond had rallied six basis points.

This sort of thing does not normally happen over the course of an hour unless there has been some noteworthy event.

The cause was the Reserve Bank of New Zealand maintaining its interbank rate and changing its stance to dovish. The official statement noted: “The Official Cash Rate (OCR) remains at 1.75 percent. Given the weaker global economic outlook and reduced momentum in domestic spending, the more likely direction of our next OCR move is down”.

One has to award 10 points for clarity.

The major US indices all closed higher overnight leaving our futures flat going into the open. The dollar is at US$0.7076 and our ten year bond at 1.72%.

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