VIEW: ASB write "courtesy of higher.....>

NEW ZEALAND: VIEW: ASB write "courtesy of higher fuel prices, we expect overall

consumer prices to rise 0.6% in the June quarter (+1.7% y/y), in line with the

RBNZ's May Monetary Policy Statement (MPS) forecast. Risks are tilted to the

downside. Tradable prices are expected to climb 1.0% (+0.2% y/y), with

non-tradable prices up 0.3% q/q (2.9% y/y). Abstracting from seasonal and

transitory influences on the inflation process, we expect annual readings from

the core inflation measures produced by Statistics NZ to oscillate around 2%,

with annual inflation from the RBNZ sectoral factor model stuck below 2%. Our

view is that downside risks to the inflation outlook have continued to grow,

with the NZ economy looking increasingly unlikely to be able to comfortably meet

the RBNZ's inflation and labour market objectives. We believe the RBNZ will cut

the OCR by a further 50bps over 2019 (August and November)."