ANZ notes that "AUD/NZD is now back.....>

AUSSIE-KIWI: ANZ notes that "AUD/NZD is now back near the levels from early Aug.

Initially, the move lower looked to be positioning-related, but more recently

the AUD has been hit by the political uncertainty surrounding the Liberal Party

leadership. The large surprise in New Zealand Q2 retail sales figures this week

added to the move, boosting views for Q2 GDP growth and mildly dampening

expectations of imminent RBNZ rate cuts. However, our fundamental views have not

shifted and we think this cross has now reached levels that present an

attractive buying opportunity. Ultimately, given that expectations for the RBA

have not shifted, we don't believe political uncertainty in itself justifies a

sustained period of AUD underperformance vs. NZD. On the NZ side, we still feel

that risks to growth are skewed to the downside. The risks to growth &

importantly how the RBNZ feels about its policy stance, are more to do with the

medium-term growth picture & next week's Biz. Conf. figures have the potential

to refocus markets' attention. Beyond this, we are also seeing an ongoing waning

in one of NZ's previous key growth driver, net migration. We recommend buying

AUD/NZD at NZ$1.0920 with a stop at NZ$1.0800 & an initial target of NZ$1.1150."