Chartpack: Australia / New Zealand Macro - May 2026

Research evidence excerpt

Chartpack: Australia / New Zealand Macro - May 2026

Policy Outlook

RBA

• After three consecutive RBA hikes, Governor Bullock has indicated the

Board now has “space” to assess risks on both sides. That hints at a pause,

for now, and DB’s base case is that this pause will extend through 2027. But the

bar for further hikes is lower than the bar for policy easing, and uncertainty about

the Iran conflict will likely remain the key driver of rate expectations over coming

months. Whether the RBA hikes rates again or not, rate cuts look a long way off

right now. After the unique-among-peers reversal of policy easing delivered in

2025, the RBA will require much more definitive evidence of inflation consistent

with the target than the data that prompted the 2025 easing cycle.

RBNZ

• Our base case for the RBNZ in 2026 is no change in rates, and two hikes in

H1-2027. The RBNZ was surprisingly hawkish at its meeting in April, highlighting

the prospect of a pre-emptive hike to limit feed-through of the oil shock to inflation

expectations. We think that was, mostly, sabre-rattling because New Zealand is

still recovering after deep recession over the year to mid 2025. As is the case for

Australia, much hinges on what comes next in the Middle East. But the most likely

outcome remains that RBNZ will let the recovery continue. New transparency

measures – including speeches by external MPC members and attributed votes –

are a welcome development.

Deutsche Bank philip.odonaghoe@db.com

Phil O’Donaghoe | Chief Economist | philip.odonaghoe@db.com 1 Research

13/05/2026 08:37:10 2010 DB Blue template