DATA REACT: Westpac on New Zealand......>

NEW ZEALAND: DATA REACT: Westpac on New Zealand GDP out earlier: "September

quarter GDP was stronger than we expected, but that was almost an incidental

detail in today's release. Stats NZ's annual benchmarking of the national

accounts has led to some major upward revisions to the reported rate of growth

over the last few years. The clear outcome is that the New Zealand economy is

larger and more productive than the previous figures portrayed. It's less

obvious, though, whether the economy is running closer to full capacity than

previously thought, since we know that inflation was very subdued over the

period of revisions. We'll spend some more time chewing through the implications

when we return next year. Our view remains that the September quarter will mark

the low point for growth in 2017. Many of the factors that held back growth - in

dairying, tourism and electricity generation - were temporary, and the

indicators to date for the December quarter have been significantly stronger."

- Kiwi bonds sold off after the release, the curve steepened, 3-/10-Year spread

3bp wider coming off the tightest levels since September.