Chartpack: Australia / New Zealand Macro - July 2026

Research evidence excerpt

Chartpack: Australia / New Zealand Macro - July 2026

Policy Outlook

RBA

• After three consecutive RBA hikes to 4.35%, Governor Bullock indicated the

Board has “space” to assess risks on both sides, but also that the RBA will

increase the cash rate further “if required”. Recent domestic data have likely

reinforced the assessment that there remains “space” to assess risks: Net job growth

was flat over April and May, and the pace of house price declines in Sydney and

Melbourne is accelerating. Trimmed mean inflation was uncomfortably high in May, but

details show clear impacts from the oil shock and Q2 is tracking in line – not above –

the RBA’s May SMP forecast (~1.0%qoq). Our base case remains for no change in

rates through 2027. But the bar for further hikes is lower than the bar for policy easing.

Rate cuts look a long way off right now. After the unique-among-peers reversal of the

policy easing delivered in 2025, RBA will require much more definitive evidence of

inflation consistent with the target before cutting rates again.

RBNZ

• The RBNZ hiked by 25bps to 2.5% at its July meeting, and hinted at more to

come, albeit with timing “highly uncertain”. DB’s base case remains for the RBNZ to

stay on hold at the three meetings scheduled over the remainder of this year, with hikes

resuming in 2027 (two 25bp hikes in H1-27). The RBNZ’s June meeting also

provided a welcome lesson in transparency with attributed opinions on inflation

risks: external members Prasanna Gai and Hailey Gourley retain more hawkish

assessments than other members. But the four ‘moderates’ (including the three RBNZ

‘insiders’: Breman, Conway and Silk) could be prompted to vote for a follow-up hike in

September if domestic activity proves stronger than expected over coming weeks and