The latest data indicate that capacity pressures have continued to ease, a trend that should continue over the coming quarters. However, it will be a while before policymakers can be confident that they have broken the back of inflation. Accordingly, we think the Antipodean central banks will be amongst the last to loosen policy. We expect the RBNZ to cut rates in Q4, while the RBA will follow suit only in Q2 2025. As for the growth outlook, there are some early signs that both economies are in for a cyclical upturn. However, with private demand set to remain subdued, growth is likely to remain below trend for the foreseeable future.
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