VIEW: Westpac now expect the RBNZ to "reduce...>

RBNZ: VIEW: Westpac now expect the RBNZ to "reduce the OCR in August and

November this year, with a risk of a more aggressive cutting profile."

- Westpac note that "we previously forecast that the RBNZ would cut the OCR in

August, citing global concerns. We now expect that the RBNZ will cut the OCR in

both August and November. There is some risk the RBNZ could deliver the cuts

more rapidly, in August and September, depending on how weak the labour market

gets. The domestic economy has clearly slowed further than anticipated. Low

business confidence is translating into slower hiring, and the forestry downturn

could cause job losses. The recent rise in the exchange rate will also bother

the RBNZ. If we are correct, retail fixed interest rates are going to fall even

further. Lower mortgage rates will strengthen our call for a housing market

upturn over the year ahead."