VIEW: ASB write "the RBNZ has made a clear.....>

RBNZ: VIEW: ASB write "the RBNZ has made a clear shift, dropping its neutral

bias & intent to keep the OCR on hold until '21, and instead flagging the more

likely direction for the next OCR move to be down. We have moved over the line

and now expect 25bp OCR cuts in August & November 2019. In the near term the

risk of an OCR cut will remain high. Every OCR announcement is now potentially

'live'. A key uncertainty is whether 2019 growth will pick up after a patchy

2018. The global economy is showing more signs of deceleration, and the RBNZ has

been surprised at times over the last year over how weak NZ growth has been.

There are still a number of supports for the economy. However, we have mounting

concern that NZ growth will not pick up sufficiently quickly to drive inflation

pressures up, particularly as business confidence started the year on a softer

tone. We do think the RBNZ has some time to wait and assess data, but we expect

that the patience of Governor Orr is wearing thin and the threshold for

tolerating weaker-than-expected data is likely to be low. If the economy doesn't

start showing signs of re-accelerating soon, then the RBNZ could conceivably cut

as early as May as it heralds in the new Monetary Policy Committee."