HomeBusiness News UpdatesFurther Cuts to OCR Expected

Further Cuts to OCR Expected

Another cut is expected in the OCR from the RBNZ on 23rd July, and probably another cut to follow later in the year. This should see shorter dated bonds performing well in the near term. However, it also means a lower interest rate for investors who wish to reinvest their maturing funds. Even after the fall in the currency last quarter, the RBNZ is keen to see it lower still, helping exporters and tourist operators. Longer-dated bonds will respond to economic data both locally and offshore. Domestically, the data has begun to slow from what were quite strong levels, while offshore it will largely be about the US and whether the economy there is seen to be strong enough to sustain higher interest rates. Shares are fully priced but still offer attractive dividends relative to bond investments. With the NZD considerably lower, there is likely to be offshore buyer interest in our market. 

Source: Financial Architects – Financial Planners August 2015

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