Livesquawk have a piece up on ASB's view on NZ. Access it here (gated, but Livesquawk have a free trial available)

In brief:

Economic momentum fading

  • Growth over 2015 will be modest compared to last year
  • Contributing to the slow-down is a combination of dry summer weather, weak dairy prices, and a levelling off in Canterbury construction activity

Economy is getting a little help from the NZ dollar & interest rates

  • Will help growth, particularly over 2016
  • ASB expect calendar 2015 growth of 2%, rising to 2.9% in 2016

Dairy:

  • Continued weakness in dairy prices
  • Increased likelihood that their recovery is more modest and distant
  • The current dairy season ending May 2016 is shaping up to have a milk price that is around last season's $4.40/kg milk solid
  • However, dairy farmers' cashflows in this current season will be weaker than last season's and, consequently, farmers will be budgeting hard
  • Strong global dairy supply growth remains a headwind to a recovery in prices
  • Confidence in the dairy sector is likely to remain weak for some time

NZD lower is boosting export competiveness

  • trade-weighted exchange rate has fallen 16% from its high a year ago, with much of the fall happening since April
  • Export industries across the board have become more competitive in a relatively short space of time
  • Tourism now vying to be our biggest foreign exchange earner

Other domestic drivers will remain positive

RBNZ:

  • ASB expect the OCR to fall to 2.5% by the end of 2015, with room for further cuts

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ps. There is a GlobalDairyTrade auction in Londot time tonight, I'll have a preview a little later.

(Yes, its spelled GlobalDairyTrade ... no spaces. Nope, no idea why)