Bank desk reactions to today's NZ Q2....>

NEW ZEALAND: Bank desk reactions to today's NZ Q2 GDP release:

- ANZ: The underlying details were generally strong, although it is uncertain

whether it will be sustained, with doubts about the strength of econ. momentum

into H218. We exp. that the RBNZ will "look through" the temporary strength, but

will be reassured by the underlying resilience in today's data, providing some

breathing room to continue to "watch, worry and wait".

- Westpac: The overall result was stronger than exp., the details were more

encouraging for growth prospects. Growth was shared widely across the econ. &

the one-offs weren't as big as we exp., which means there's less risk of an

unwind in the next quarter. In addition, the one-offs weren't all positive. The

RBNZ has said that if growth doesn't accelerate in the way that it exp., it is

likely to move towards OCR cuts. Its forecast in the August Monetary Policy

Statement was for a 0.5% rise in GDP for Q2, though there has been a substantial

amount of data since then pointing to a stronger number. Today's result doesn't

guarantee that the economy is on an accelerating path, but it does argue against

the case for OCR cuts in the near future.