VIEW: J.P.Morgan note that they "have been.....>

RBNZ: VIEW: J.P.Morgan note that they "have been expecting the RBNZ to cut a

further 50bp this year, as we were sceptical of the central bank's narrative

that public works projects could fill the hole in private demand over the next

12 months. With global growth under increasing threat & other central banks

likely to act, conditions are now clearly too turbulent for the RBNZ to bank on

executing this dainty transition. We are bringing forward our call for cuts from

August & November to March & May (both 25bp). As the RBNZ demonstrated very

clearly in August last year, 50bp moves are on the table, and are probably more

likely than they are to come from the RBA. Working against this is the fact that

the March meeting is at the end of the month, giving time for a more considered

response, and as officials have said monetary policy is not well-suited to deal

with the COVID-19 shock. That view is probably evolving given the intensity of

the global slowdown near term means the cycle will be more fragile for the

remainder of this year, regardless of whether we call it a demand or supply

shock. The performance of the NZD between now & the next meeting will also be

important in modulating the policy response."