VIEW: Westpac expect the "CPI release...>

NEW ZEALAND: VIEW: Westpac expect the "CPI release to show a modest 0.6% rise in

prices for the June quarter, led by a bounce in fuel prices. That would see the

annual inflation rate lift slightly from 1.5% to 1.7%, although the various

measures of 'core' inflation are likely to be more or less unchanged. Inflation

remains close to, but below, the 2% midpoint of the Reserve Bank's target range.

Our forecast of inflation for the June quarter (and indeed for the rest of the

year) is much in line with what the Reserve Bank expected in its May Monetary

Policy Statement. With risks to the global economy mounting, the RBNZ has

already indicated that a further OCR cut is likely at its August review. We

think it would take a substantial upside surprise, with annual inflation

reaching 2% or more, to make the RBNZ hesitate."