For five consecutive quarters the economy has shrunk, and this news has now been fed into economists’ thinking on interest rates.

ASB continues to be the bank in the minority and suggests there maybe further cuts to the official cash rate.

In this week’s economic report it says while there are “green shoots” appearing in the housing market they are “conspicuously absent in other sectors.”

“At some stage down the track the RBNZ may want to deliver further monetary stimulus – or more correctly try and mitigate the lifts in the NZD and long-term interest rates.

"In expecting any further rate cuts we are distinctly in the minority, but the GDP figures still suggest to us that the RBNZ will keep open the door to that option.”

Bank of New Zealand chief economist Tony Alexander didn’t produce his Weekly Overview last week due to illness. The one point he made last Thursday night worth noting is that “wholesale interest rates have maintained their upward trend implying further increases in fixed mortgage rates in coming weeks.”

Meanwhile, BNZ Capital Markets produces some graphs showing how the longer-term swap rates have been increasing.

Westpac reiterates a theme seen in a number of this week’s economic reports.

It suggests the awful figures we have seen, such as last week’s GDP number, show we are near the bottom of the cycle.

The bank headlines its report, Through the Worst, reflecting this theme. Its economists are saying the Reserve Bank is “nearing the end of its easing cycle, short-term rates are unlikely to fall significantly further, while long-term rates will continue to anticipate the next tightening cycle.

“For those borrowers currently on floating rates who have been looking to time their re-entry into fixed rates, we recommend fixing now for six months to one year, which are easily the most favourable rates on offer.”

ANZ in its Market Focus takes a view that the OCR is “on hold with an easing bias” suggesting hikes are a long way off.

“Our favoured strategy remains unchanged, which is to stay floating. With hikes, in our view, being prematurely priced into the curve, you will be paying a premium to fix at current levels. Of course, the risk is that all the “green shoots” being talked about start to blossom, and the RBNZ is indeed forced to normalise policy quicker and faster than envisaged, causing yields to rise further.”