No sustained reaction in the NZD/USD &.........>

KIWI: No sustained reaction in the NZD/USD & AUD/NZD to the latest ANZ business

confidence survey, which saw the headline metric fall to -38.1 from -32.0, while

the activity outlook reading dipped to 8.0 from 8.5.

- ANZ noted that "inflation indicators were mixed: pricing intentions fell,

reported cost pressures were unchanged, and inflation expectations lifted

slightly. Residential construction intentions bounced. However, the construction

sector has the weakest employment and profitability intentions across the

economy. The outlook for the economy is murky. As things stand, there is no

reason for the economy to fall into a deep hole. Commodity prices are good,

interest rates are at record lows, and the labour market is tight. But the

economy is facing credit and cost headwinds and the global outlook is

deteriorating. On the latter, for all that our commodity prices have been

resilient, the risks are looking decidedly one-sided. Upside risks to growth

appear few and far between and with the inflation outlook not consistent with

the target midpoint we expect two more OCR cuts this year."