Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The New Zealand bonds closed mixed on Thursday after Reserve Bank of New Zealand left policy arte unchanged at 2.25 pct. The yield on the benchmark 10-year bonds which moves inversely to its price closed at 2.880 pct and the yield on the 2-year bonds closed higher 0.24 pct to 2.105 pct.
New Zealand’s central bank, RBNZ, kept the OCR on hold at 2.25% and retained a clear easing bias. It stated that “further policy easing may be required”. This was on par with projections, said ANZ. The monetary policy statement was slightly less dovish in April from March. The central bank is still upbeat about the New Zealand’s economic outlook. It sees risks on the downside as well as on the upside to the economic outlook. The RBNZ stated that house price growth in Auckland has recently risen, instead of moderating.
Reserve Bank of New Zealand Governor Wheeler said that the outlook for the global economy remains uncertain due to weaker growth in China and other emerging markets. The Governor expects house prices in Auckland to surge in future, driven by the pressure in the housing market. In addition, Wheeler also commented that the main risks in the domestic economy relate to weakness in the dairy and housing sector.
Lastly, we foresee the RBNZ cutting rate in June to around 2% and expectations of a further rate cut in August remains on. The apex bank may act on the housing market if they cut any further. However, the bank has not signaled any cut in the next policy meet in June, retaining its easing bias.
