ANZ write that "the NZ econ has had a...>

NEW ZEALAND: ANZ write that "the NZ econ has had a good run & while it's not

over yet, annual growth with a 3-handle over the next couple of years looks a

stretch. Momentum has slowed & it's likely this process has further to run as

the drivers of growth continue to become less synchronised. Adding to the list

of headwinds, confirmed and probable changes to bank capital requirements

suggest financial conditions will gradually tighten. All up, slowing growth in

the context of inflation that's still shy of the RBNZ's target midpoint means

the case for a little extra monetary stimulus will become evident. The RBNZ has

adopted a cautious, neutral tone but continues to signal eventual rate hikes. In

contrast, we now see the OCR as more likely to be cut. Mkt pricing will likely

ebb & flow along with the data, particularly given volatility emanating from

offshore at present. But ultimately, we expect that a more challenging domestic

& global environment will eventually spur the RBNZ into action. As the mkt

prices a lower OCR, this will weigh on the NZD (along with a challenging

backdrop for risk currencies). We expect NZD/USD to reach $0.61 by year end."