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VIEW: ANZ write "the RBNZ will purchase........>

RBNZ: VIEW: ANZ write "the RBNZ will purchase NZ$30bn of NZGBs with a range of
maturities across the yield curve over the next 12 months, with purchases
starting this week. This package is huge. Our analysis last week flagged the
need for purchases of NZ$15-20bn per annum, if not more, and this announcement
is even larger with that. Our exp. were at the top end of market, so we expect
this package to have a significant impact. QE will help support the economy and
soothe markets that have been dysfunctional. We believe this package will have
an immediate and significant impact on the local bond market, especially with
NZDM set to issue NZGBs at a $20bn annualised pace in Q2. There will be
beneficial knock-ons across the credit spectrum. More QE, liquidity measures and
market intervention may yet be needed. Of note, the RBNZ has said they will
adjust the size and nature of the program as required. We also see a case for
easing the counter-cyclical capital buffer to help facilitate the provision of
credit. Next we expect another broad fiscal response; last week's package was
only the first tranche. The RBNZ's move today paves the way for more government
spending, by helping soak up the looming supply of bonds."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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