VIEW: BNZ writes "ultimately, softer than......>

RBNZ: VIEW: BNZ writes "ultimately, softer than expected growth is likely to

dominate the RBNZ's thinking so we are today including a February rate cut into

our forecast cash rate track in addition to the reduction we expect in November.

We are quick to note that this shift in stance has been well foreshadowed and we

are doing it today because we have recently lowered our growth forecasts not

because of anything in the OCR statement. Moreover, if growth slows as low as

many of our leading indicators are currently foretelling then even more rate

cuts are a distinct possibility. That said, there are the first signs of

evidence in the committee's summary record of meeting that the RBNZ would be

open to a pause, at some stage in the not too distant future, by acknowledging

"the long and variable lags between monetary policy decisions and outcomes". We

would thus not be surprised if the RBNZ looked to an extended period of no rate

movement after the February cut. While we are not forecasting it, we would

actually be comfortable with an extended pause now."