New Zealand RBNZ to cut rates

In New Zealand, the RBNZ adopted an easing bias in April and acted on that bias in June, cutting the cash rate by 25bp, to 3.25%. 

Strong house prices is not regarded as obstacle to cutting rates, given the RBNZ has announced new macroprudential measures directed at the overheating Auckland property market, reinforced by new tax measures. 

"Given average underlying inflation is significantly below the 2% target, a cut is expected and a follow-up cut is forecasted in July", says Barclays.

A risk that rates go below 3% if underlying inflation stays low is seen, given the economy looks to have slowed, states Barclays.