NZD continues to come under pressure...........>

KIWI: NZD continues to come under pressure. Traders had initially ignored the

in-line headlines of the GDP release but are perhaps now paying more attention

to the breakdown.

- There was a fall in construction, but a key disappointment in the data was

flat growth in household consumption, this could have an impact on the Reserve

Bank's monetary policy outlook. The print marked a sharp slowing from the 4.2%

y/y household consumption growth in Q4. Part of this slowing may be temporary

due to a decline in spending on used cars which was likely the result of reduced

availability of cars after stink bugs were detected in car shipments. Still,

trends in household spending need to be watched closely because the slowing

occurred at a greater rate than the RBNZ expected, indeed, the Reserve Bank had

highlighted that the risk to household spending was to the upside.

- NZD/USD last trades at $0.6842, representing a fresh YtD low, with bears now

looking to $0.6815 (monthly low Dec 2017).