Recent developments reinforce the divergent outlooks for the Antipodean economies. The RBA has cut rates by just 75bp so far. Given the relative resilience of the Australian economy and ongoing signs of inflation persistence, the Bank is likely to stay on hold in the near term. That said, as the labour market loosens and price pressures ease again, we still see scope for the RBA to cut by another 50bp in H2 2026. In contrast, the RBNZ has already slashed rates by a cumulative 300bp, to help lift the economy out of its deep downturn. But amid early signs that the worst is over, we believe the next 25bp cut in November will mark the end of its easing cycle.
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