VIEW: Westpac write: "The RBNZ Survey has......>

RBNZ: VIEW: Westpac write: "The RBNZ Survey has revealed a further decline in

inflation exp. This alters the balance of available info ahead of tomorrow's OCR

decision. Accordingly, we are reverting to forecasting an OCR cut tomorrow

(prev. on hold). Our suspicion was that the survey would rebound, as the data

are often volatile q/q. The fact that exp. fell further will be quite concerning

to the RBNZ. It now seems more likely that the RBNZ will cut the OCR tomorrow,

although we still regard it as a close call. The RBNZ receives the survey

results well before they are released to the mkt, so today's numbers were known

to the RBNZ early enough - they just weren't known to anybody else. If the RBNZ

does cut, we would exp. no explicit signal of future follow-up cuts, similar to

the May & Aug MPSs. We would exp. the OCR forecast to be around 0.75%, again not

signalling any intent to cut again. However, we would exp. the RBNZ to remain

open to the possibility of further cuts with a phrase like "There is scope for

further fiscal and monetary easing if necessary." We would also exp. the RBNZ to

try to rectify these flagging inflation exp. with something like the Aug phrase.

We are now forecasting no change in the OCR over 2020 and 2021."