Interest rates are now fairly much at historical lows. It's a certainty they will rise at some point in the future, the question is when......
Rates have come off around 20 bpts in last few days given volatile markets offshore. The SWAP spread between short term rates and long term rates is now approx. 80 bpts. This points to long term rates now of around 6.4% which are incredibly attractive. However floating rates are still hovering around 5% which makes these still very appealing. It's a great dilemma to be in as both fixed and floating rates offer one thing - they are pretty much at historical lows!!
As the NZ economy improves (it received a great kick yesterday with the $10b + Fonterra payout yesterday) one would expect Dr Bollard to increase the OCR, however global sentiment will continue to impact on the timeliness of the OCR rising.