VIEW: ING note that "the Reserve Bank of New...>

RBNZ: VIEW: ING note that "the Reserve Bank of New Zealand's August statement

indicates the current cash rate of 1.75% is likely to be maintained through 2019

and 2020. The guidance back in May did not push the cash rate stability out as

far. In contrast to Australia, implied market pricing looks for a chance of some

easing, with about a one in four chance of a rate cut priced in by February

2019. This more downbeat projection reflects the New Zealand economy's slowdown.

Like Australia, there is some slowdown in the housing market, which is weighing

on residential construction and could lead to softer consumer spending. The RBNZ

acknowledge the possibility of some tightening in the scenarios they present,

which alongside a more upbeat inflation scenario, with higher rates sooner, also

considers the impact of growth failing to pick up after the recent slowdown,

concluding that this would need the official cash rate to be reduced by around

100bp. With the escalation of the trade war, questions over the resilience of

their larger neighbour, and some signs of weakness in Asia, we think the market

has priced the balance of risks to the current cash rate about right."