Morgan Stanley recommend going long NZD/USD....>

KIWI: Morgan Stanley recommend going long NZD/USD at $0.6530, with a target of

$0.7000 and a stop at $0.6400.

- MS write "following the RBNZ's OCR cut, we see upside potential for the NZD.

The RBNZ's forecast indicated that it sees little chance of a cut until early

2020. Chinese PPI growth has started to tick up, which may pass through to the

tradeable component of inflation in New Zealand - which may keep the RBNZ from

cutting further. A market expecting cuts from the RBNZ may be disappointed in

coming weeks if central bank rhetoric turns. Dairy prices have rebounded, and we

expect the increase to pass through to a stronger NZD/USD. Weakness in the New

Zealand housing sector may take several weeks to materialize in the form of

weaker economic data, although an earlier and more pronounced downturn in

housing data is a risk to the trade."