Daily Alert: USD slips despite markets’ funk

  • Budget 2022 showed a slightly delayed return to surplus given the weaker economic backdrop, challenges posed by high inflation, and widespread capacity constraints
  • This resulted in a mildly less restrictive fiscal impulse from 2023 onwards (relative to the HYEFU update), providing a small boost to NZ wholesale interest rates (3-4bps) and the NZD/USD (+30-40 points) yesterday
  • The bond programme was lifted by $26b over 5 years, roughly as expected, with most of this related to the buy-back of RBNZ bond holdings

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