MNI RBNZ Preview-April 2025: 25bp Cut, May Meeting Open

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EXECUTIVE SUMMARY: 

• The RBNZ decision is on April 9 and it is unanimously expected to continue its easing cycle with a 25bp rate cut bringing the OCR to 3.50% and then maintain its easing bias.
• RBNZ dated OIS pricing 27bps of easing is priced for tomorrow, with a cumulative 98bps by November 2025.
• Data have remained soft but still signal a gradual recovery and so the MPC is likely to ease in line with its February guidance. It is also the first meeting since Governor Orr unexpectedly resigned and there is no reason to deviate from the message at this stage.
• There is likely to be little direct impact on NZ from the US’ 10% tariff on its exports, even though it is NZ’s second largest destination. However, the indirect impact from slower global growth due to a trade war and the 54% US tariff on imports from China are a significant concern, NZ’s largest trading partner.  How this issue develops is likely to determine the size of the May 28 rate cut.