RBNZ dilemma on rate cut

Will the Reserve Bank of New Zealand (RBNZ) cut interest rates tomorrow night or not? The reasons for and against are more or less balanced. 

Falling sentiment indicators and a disappointing development on the labour market provided good reasons for a rate cut recently. 

"However, the RBNZ already had sufficient reason for a rate cut at the last meeting as inflation in Q1 had eased to 0.1%, but it hesitated nonetheless. The RBNZ will wait for the publication of some important data such as Q1 GDP data, but will signal a rate cut for July in case of renewed weak data. However, a lower NZD-USD levels is expected to see again over the coming months as the RBNZ cannot really accept a notable NZD appreciation in the current economic environment", says Commerzbank in a report on Wednesday.