As New Zealand’s 2Q GDP beat earlier forecast of 0.8% and rose by 1%, Long NZD/USD? 

• In the second quarter, New Zealand economic growth was broad-based with 15 of 16 industries recording higher production. 
• Economic growth accelerated to 2.8% from 2.6% on y/y basis. 
• New Zealand’s overnight Interest rate swaps previously pricing for a rate cut by mid-2019 fell from 10bps to 5bps yesterday. Moreover, investors have reduced bets on a rate decrease after today’s GDP report. Market has priced in a 22% chance of a single rate cut by June, down from 36 % yesterday. 
• On the other hand, China is planning to cut the average tariff rates on imports from the majority of its trading partners as soon as next month, according to a Bloomberg report 
• Import tax cut to China can be seen as good news to countries who largely rely on China’s growth, such as Australia and New Zealand