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."