Nomura's musings; NZ business............>

DATA REACT: Nomura's musings; NZ business confidence has held near its 8yr

post-election lows in December (-37.8), although the activity outlook measure

bounced in the month (from 6.5 to 15.6). That said, despite the lift the

activity outlook measure is still the 2nd lowest reading since Q3 2015. The turn

in housing momentum, and net migration flattening off are dampening momentum and

this is coupled with the more subdued business confidence and consumer

confidence (which dipped to a low since Q2 2016 earlier this morning). Risks

related to the dry weather are another factor to consider in the early part of

2018. These developments should continue to generate growth headwinds and keep

the RBNZ sidelined for an extended period. This should limit the extent of the

squeeze back in kiwi from current levels, and may re-assert itself as a driver

in the new year. Looking ahead, Q3 NZ GDP is released (Thurs). We see downside

risks to the consensus expectations (mkt 0.6%qoq)