VIEW: ASB write "the on-hold decision was......>

RBNZ: VIEW: ASB write "the on-hold decision was widely expected, though a rate

cut wouldn't have been a big surprise after the bold action last month. But, in

line with our view, events since the August cut weren't large enough to prompt

getting further on the front foot. The murky global environment and weak

business confidence remain as growth risks. Against that, the RBNZ is heartened

by the impact its monetary easing has had and expects household and business

spending to pick up in response - and has put greater emphasis on fiscal policy.

Even though the OCR remained steady at this meeting, a lower OCR remains very

much on the cards. We continue to expect a 25bp cut in November, which today's

statement and meeting summary leave the door open for. But by itself the

statement suggests that a November cut isn't a dead certainty, with a lingering

possibility that an improved environment could see the RBNZ hold fire. We still

see a November OCR cut as the highly likely outcome, and have a list of several

catalysts that could trigger follow-up action next year. Importantly, we expect

growth will fall short of the RBNZ's August forecast, which should

prompt the RBNZ to eventually break across the advantage line again."