Stock market rallies as RBNZ eases rates higher

The Reserve Bank of New Zealand lifted the OCR to 0.75% as it slowly applies the brakes to an economy it considers to be running too hot.

ANZ economists said “markets breathed a sigh of relief”, not just because of the smaller hike but also because it only lifted its OCR forecast about half a percent higher than in August.

Traders were positioned for a hawkish statement and the delivery of a 50-basis point move, said KiwiBank chief economist Jarrod Kerr.

“Financial market traders reacted immediately, selling the Kiwi dollar and pushing wholesale rates down,” he said.