VIEW: BNZ note that "post NZDM's issuance......>

RBNZ: VIEW: BNZ note that "post NZDM's issuance announcement yesterday, there is

speculation the RBNZ will just raise its QE programme again. We need to

emphasise that the constraint is ultimately not the programme size, but the 50%

limit on holding nominal NZGBs. The RBNZ can continue to front-load purchases,

but this means it will need to taper aggressively from the start of next year.

Under the banner of "avoiding unnecessary instability in financial markets", we

think it would be better for the RBNZ to slow down its weekly pace of purchases

in the next month or so to reduce the risk of a 'tantrum' down the line. We can

see the RBNZ ultimately moving towards Yield Curve Control. Even then, the very

long-end of the NZGB curve will need to steepen and cheapen relative to other

markets, in our view."