UBS note that "the market now prices the.......>

KIWI: UBS note that "the market now prices the RBNZ's baseline OCR path.

Therefore, depreciation pressures from recent dovishness of the RBNZ have run

their course. Because we also estimate that Fed policy is adequately priced,

interest rate differentials are likely to be a wash for the cross. Considering

our expectations for a rise in milk prices, Euro strength, slightly hawkish view

on the RBNZ, as well as the chance that the risk sentiment faces fewer

challenges in the months ahead suggests that the NZD is likely to be modestly

higher by year end. We estimate that the Kiwi is cheap, which supports this

argument. In light of the bank's commentary, we have revised our end-18 NZD/USD

forecast to $0.69 from $0.73. This modest appreciation leaves the NZD as a G10

underperformer. We also close our long NZD/TWD top trade with a profit of 1.2%."