Hedge Funds Position for Fewer New Zealand Rate Increases

Hedge funds are positioning for the Reserve Bank of New Zealand to deliver fewer interest-rate cuts than the five quarter-point reductions currently priced into swaps markets. The funds base their stance on expectations of a weak economic backdrop that could limit the central bank's room to ease policy.

Swaps contracts reflect five quarter-point reductions over the coming policy meetings. Hedge-fund positioning suggests the actual path of easing will fall short of that total. No specific timing or size of individual moves has been detailed in the reported positions.