VIEW: J.P.Morgan are the outlier in the BBG....>

RBNZ: VIEW: J.P.Morgan are the outlier in the BBG survey ahead of this week's

RBNZ decision. They are the only name among those surveyed looking for a cut in

the OCR. They note that "additional policy moves now come down to squeezing the

last bit of toothpaste out of the tube. Still, in our view choices should be

guided by the principle of doing as much as possible, subject to operational

constraints. We think the choice that makes most sense is an expansion of the

LSAP program, alongside a 15bp cut in the OCR to 0.1%. Some degree of

contradiction in existing guidance is guaranteed no matter what the specifics in

May. But facing a very deep shock where the ELB binds, it is hard to justify

leaving any stone unturned in lowering financing costs across the economy.

Expansion of the LSAPs is the less controversial part, in that RBNZ leadership

has clearly flagged a review of the program size will occur in May.

Conspicuously, this is facilitating and is facilitated by the national budget

the same week, and Governor Orr has suggested in that context he is

"open-minded" on debt monetization. We have expected an expansion from NZ$30bn

(excluding LGFAs) to around NZ$40bn."