Subdued data keep RBNZ on track to cut rates in May

We expect the recent string of soft economic data will be enough for the Reserve Bank of New Zealand (RBNZ) to cut rates to 1.50% when it meets next week on Wednesday 8th May. Since the RBNZ shifted to an easing bias in March the economic data have remained generally subdued, supporting the case for a rate cut. And we suspect that a rising unemployment rate and subdued underlying inflation in 2019 will force the Bank to cut rates again in November.