Westpac have recommended receiving.....>

AUSSIE SWAPS: Westpac have recommended receiving NZ 2-Year swaps vs. paying

Australian 2-Year swaps, with an entry point of 28bp, target of 44bp and stop at

10bp.

- Westpac reason that "next week's RBA and RBNZ meetings on Tue and Wed are each

close to 50% priced for a cut. We expect the RBNZ to cut but the RBA to shift to

an easing bias. NZ swap rates should fall in response, whereas AU swap rates

should be little change because two cuts later in 2019 are already priced. Over

the past month, the NZ-AU 2-Year swap spread has more than retraced the reaction

to the RBNZ's 27 Mar MPS, presenting a receiving opportunity." They warn that

"the RBNZ may not cut in May, but deliver an easing signal for later this year."

They also note that "the RBA may cut in May, rather than waiting until the

August meeting as we expect."