ECB Set for September Rate Hike as Energy Prices Fuel Inflation 
US Bans Canadian Alcohol, Motorcycles as Trade War Escalates 
China Boosts Gold Reserves by 650,000 Ounces as Prices Rally 
China to Inject $45 Billion Into State Financial Institutions 
Bank of Korea Raises Rates to 3% as Inflation Stays Sticky 
Iran Plans New Gulf Restricted Zone as Hormuz Tensions Push Oil Higher 
Japanese Yen Nears Seven-Month High as Oil Approaches $100 
Oil Prices Rally as Brent Nears $100 on U.S.-Iran Escalation 
Australia GDP Beats Forecast, Boosting RBA Rate Hike Bets 
Japan GDP Growth Beats Forecast, Boosting BOJ Rate Hike Bets 
Iran Vows Tougher Response as U.S. Sanctions Squeeze Economy 
UK Food Inflation Forecast to Hit 6.4% by Mid-2027 
Oil Prices Climb as Iran Threatens Gulf Energy Infrastructure 
Add as a preferred source on Google
New Zealand’s central bank is expected to cut its official cash rate (OCR) by 25 basis points to 3.50% this Wednesday, responding to growing global economic uncertainty fueled by new U.S. tariffs. All 31 economists in a Reuters poll predicted the Reserve Bank of New Zealand (RBNZ) would move ahead with the cut, marking a total reduction of 175 basis points since August last year.
The RBNZ had previously signaled potential rate cuts in April and May, contingent on evolving economic conditions. However, recent events—particularly the U.S. announcement of sweeping tariffs, including a 10% tariff on New Zealand goods—have heightened fears of a global recession. As New Zealand’s second-largest export destination, U.S. trade policy changes could significantly affect the local economy.
Markets now anticipate the OCR could fall to 2.75% in the coming months, below last week’s forecast of 3%. The NZX-50 index has dropped 4.4% since the tariff announcement, and the New Zealand dollar has weakened by 4.1%, now trading at US$0.5560.
Stephen Toplis, Head of Research at Bank of New Zealand, emphasized the importance of consistency from the RBNZ, though he acknowledged that the bank’s forward guidance may shift in light of global instability. As the first central bank to meet following the tariff news, the RBNZ’s response could set the tone for others.
Westpac chief economist Kelly Eckhold noted that financial volatility could tighten conditions further, reinforcing the case for continued rate cuts and an ongoing easing bias. While the direct impact of U.S. tariffs on New Zealand exports may be limited, reduced growth in key trading partners like China and Australia poses medium-term risks to export demand and economic performance.
