With Covid-19 set to cause a massive downturn in economic activity, a massive monetary and fiscal response will be required. We now expect the RBNZ will reduce the OCR to -0.5% in November 2020. We also expect an expansion of the RBNZ’s bond buying program, as well as further Government stimulus for the economy. We have updated our economic and financial forecasts: – We now expect a deeper decline in June quarter GDP of 16%, because the Alert Level 3 restrictions are tighter than we previously allowed for. – The country may drop to Level 2 earlier than we previously thought, allowing a more vigorous rebound in GDP. ... (full story)