VIEWS: A couple of reaction pieces......>

NEW ZEALAND: VIEWS: A couple of reaction pieces re: NZ Q3 GDP

- ANZ: All up, despite the slightly stronger print than exp., today's data

reflect an econ that slowed sharply in '19 - indeed, more sharply than we had

previously believed. But the good news is that forward-looking indicators

suggest a stabilisation in growth going into '20. In the meantime, growth

continues to fall short of the roughly 2.6% y/y rate that the RBNZ needs to see

exceeded for inflationary pressure to build. Looking forward, it remains a story

of growth just not quite delivering what the RBNZ needs to be confident of

hitting its inflation tgt, with inflation pressures set to wane in this

environment & inflation exp. at risk of falling further. Given that, we think

that a lower OCR is likely in time. We have pencilled in a 25bp cut in for May.

- Westpac: Our view remains that Q3 likely marked the low point for the econ

this year - there is a growing range of evidence that points to a lift in

momentum since then. However, the renewed vol of the quarterly GDP figures may

obscure that to some degree. While Q3 was substantially stronger than the RBNZ's

forecast of 0.3%, the bigger issue will be how they treat the revisions.