Deutsche Bank-Macro Notes The DB ANZOMMO February 2024-106579873

Distributedon:18/02/202423:58:09GMTDeutscheBankResearchTheDBANZOMMOAustralia/NewZealandOneMinuteMacroOverviewPhilO’DonaghoeChiefEconomistphilip.odonaghoe@db.comFebruary2024IMPORTANTRESEARCHDISCLOSURESANDANALYSTCERTIFICATIONSLOCATEDINAPPENDIX1.MCI(P)041/10/2023.UNTIL19thMARCH2021INCOMPLETEDISCLOSUREINFORMATIONMAYHAVEBEENDISPLAYED,PLEASESEEAPPENDIX1FORFURTHERDETAILS.7T2se3r0Ot6kwoPaPolicyOutlookRBA▪Nomorehikes,cutsinQ3.WethinkthecurrentRBAcashrateof4.35%willbetheterminalratethishikingcycle.Ourbasecaseisfor50bpsofcutsthisyear,with25bpcutsinAugustandNovember,foranend-yearcashrateof3.85%.Weassumeafurther100bpsofcutsin2025to3.1%,i.e,furthereasingtowardsourestimateofneutralnominalcashat2½%.Wethinkneartermrisksareskewedtoanearlierstarttopolicyeasing.AMayratecutispossible.RBNZ▪Nomorehikes,cutsinQ3.WethinkthecurrentRBNZcashrateof5.5%willbetheterminalratethishikingcycle,thattheeconomyre-enteredrecessioninH2-2023,andtheRBNZwillbecuttingalmostayearearlierthanitscurrentguidancesuggests.Specifically,ourbaselineisforthefirstRBNZratecutinQ3-2024.Weassume75bpsofcutsinH2-2024,with25bpratecutsattheAugust,OctoberandNovembermeetings,foranend-yearOCRat4.75%.RisksareskewedtotheRBNZcuttinglaterthanweexpect.DeutscheBankPhilO’DonaghoeChiefEconomistphilip.odonaghoe@db.com1Research19/02/202407:12:372010DBBluetemplateKeyForecastsDB's...