ANZ write that "the NZ econ is..........>

NEW ZEALAND: ANZ write that "the NZ econ is undergoing a transition. Prev.

engines of growth are not revving as they once were & the econ is facing

headwinds. We exp. the economy will struggle to grow > trend & acceleration in

GDP growth from here seems unlikely. Based on our exp. that GDP will grow 2.5-3%

y/y, we exp. it will be difficult to sustain inflation near 2% y/y over the

medium term. Headline inflation looks set to rise, but much of this will be

transitory & the RBNZ will look through it. We exp. the OCR on hold for the

foreseeable; the RBNZ has time to see how conditions evolve. But given the risks

of an eventual growth sputter, we see it as more likely that the next move is a

cut than a hike. The RBNZ continues to signal it wants to be late to the global

rate hiking party, or a no-show altogether. The NZD is being impacted by local

yield themes as well as a softer outlook for the terms of trade. Together with

tightening global liquidity, we expect the NZD/USD to reach 0.61 by early next

year."