Research Team at ANZ, suggests that with the market not fully pricing in the 50bps of RBNZ cuts they expect over 2016, there is scope for short-term rates to move lower over time. Key Quotes “However, a near term catalyst for yields to fall is absent, with domestic activity still robust and leading indicators holding up. The long end has taken comfort from the Fed’s surprisingly dovish tone. We have lowered our near-term US bond forecasts, but New Zealand’s still-high outright yields should help slow the climb in local long term yields as geographic spreads narrow. USD effects are dominating the kiwi as NZD/USD trades above where it was before the RBNZ cut rates. We continue to view the risks to the NZD outlook as being to the downside, but do not see an imminent catalyst, particularly with local data still robust. This leaves us favouring selling NZD/USD at the top of the range, but without any urgency.” For more information, read our latest forex news.