Australia and New Zealand Weekly

Westpac expects the RBNZ to hold rates at 2.25% this week but deliver hawkish forward guidance, while Australian indicators suggest weakening momentum and sticky inflation.

Key Takeaways

• 1.The RBNZ is expected to hold the OCR at 2.25% in May but signal a more hawkish path with potential hikes later in 2026 due to war-driven inflation.
• 2.Fiscal policy suffers from a 'time-inconsistency problem' where governments project revenue from bracket creep that they ultimately tend to return through tax cuts.
• 3.Australian economic momentum is slowing, with unemployment rising to 4.5% and a projected 4.8% annual CPI headline for April.

Table of Contents

• Economic Insight: What fiscal can learn from monetary
• The Week That Was: Consumers wonder what's next
• Focus on New Zealand: To hold or not to hold, that is the question
• Australia: Week Ahead
• New Zealand: Week Ahead
• Looking Further Ahead
• Corporate Directory
• Disclaimer

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