Outlook for Borrowers: Post November MPS
The Reserve Bank of New Zealand (RBNZ) reduced the Official Cash Rate (OCR) by 25bp to 2.25% at the Monetary Policy Statement (MPS) on Wednesday. The rate cut was widely expected by analysts. Market pricing implied a small chance of a larger cut following the surprising 50bp move in October. The decision was reached by 5-1 majority. The dissenter preferred to leave rates on hold, which was the alternative option discussed by the Committee. This was Governor Hawkesby’s final meeting with Dr Anna Breman beginning her term on 1 December.
NZGB May-2036 tap syndication before year end
At the Budget in May, New Zealand Debt Management (NZDM) announced it expected to undertake three tap syndications of nominal lines in 2025/26. A NZ$6 billion tap of the May-2031 maturity took place in July. It was announced in the Monthly Tender Schedule this morning that a syndicated tap of the existing 15 May 2036 nominal bond will be undertaken before calendar year end. We expect the transaction will take place in November.
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