Inflationary Pressures Build

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1 Inflationary Pressures Build Migration records beaten again Questioning our GDP slowdown story Either way, inflationary pressures continue to build Necessitating a Reserve Bank response Trade data support the NZD We are beginning to foresee the potential for a rather unusual picture for the New Zealand economy which sees growth moderating yet inflation rising. If we are right, this will necessitate a more aggressive interest rate cycle than the Reserve Bank is currently forecasting which in turn will possibly result in an even softer growth cycle than many are projecting. And for those who struggle with the concept that interest rates could possibly be going up as growth falls, we note that there is a relatively recent precedent for this through 2003 to 2007 (as below). We are relatively convinced that we have already seen the peak in New Zealand s growth rate and the trough in both inflation and interest rates. From here on in it s a matter of monitoring just how far the trend reversal will continue. That said, we are cognisant that our expectation of a softening in the economic expansion continues to be beaten up by stronger and stronger population growth, as net migration keeps surprising to the upside. But while our weakening growth forecasts might be under threat any such upside surprise on this front would simply heighten our already significant concerns about inflation. There is a swathe of domestic data this week that will give us significant pointers as to the evolution of the relative developments in both growth and inflation. Perhaps the Growth Down, Rates Up? Annual % change Real GDP (lhs) Source: Statistics New Zealand, BNZ A Precedent? - GDP growth falling - Rates rising GDP and the Cash Rate % Cash rate (rhs) Forecasts most important of these will be Tuesday s ANZ Survey of Business Opinion, which will cover off both the growth and inflation sides of the equation. The own-activity series is the key indicator of future growth. It is has been drifting lower (on a seasonally adjusted basis) since its peak in September Nonetheless, while we do think New Zealand s growth rate will start moderating, it is probably too soon for this to show up significantly in this indicator. Accordingly, we will be looking for a headline reading around the 40 mark. We will also be particularly interested in the employment indicator. This has been running at very high levels and, if it doesn t drop soon will imply huge pressure on the labour market and productivity. With this in mind, a moderation in employment expectations might be seen as a relief rather than a concern. Jobs ads on Friday will also shed more light on labour market conditions. From the Reserve Bank s perspective, the pricing intentions and inflation expectations series in the ANZ survey will be front of mind. The Bank has been overjoyed with the recent lift in expectations. But it won t want them pushing much higher. In particular, keep an eye on the pricing intentions series which at 25.6 already portends headline inflation pushing through the 2.0% RBNZ target mid-point. Activity data will dominate the remainder of the week s releases. First up were this morning s migration figures which continue to get stronger and stronger. Net migration rose to a record high of 71,300 in the year ended January Moreover, the data for the month suggests it s headed higher still. The 6,460 seasonally Inflation Expectations Rising net % expecting to increase in next 3 months Feb-99 Feb-01 Feb-03 Feb-05 Feb-07 Feb-09 Feb-11 Feb-13 Feb-15 Source: ANZ, BNZ Business Inflation Pointers Monthly Own pricing Intentions General Inflation Expectations (rhs) Annual % change

2 Migration Hits New High Visitor Explosion Continues Net inflow (000s) 100 Net Immigration Annual total (mil) Overseas Visitor Arrivals Mthly SA Annualised Annual running total Source: Statistics New Zealand, BNZ Monthly Source: BNZ, Statistics New Zealand Monthly adjusted monthly increase translates to an annualised 77,520! This will add further pressure to domestic demand and adds significant upside risk to our GDP growth forecasts. Accompanying these data were tourism numbers for the month of January. These figures continue to be exceptionally strong with visitor arrivals up 11.0% on the same month a year ago. Again, Asian inflows are at the forefront of the expansion, up an annual 22.8%, but it would be wrong to assume that growth is simply an Asian phenomena. Visitors from Europe rose 9.1%, and from the Americas 16.1%. Not only does this say a lot about New Zealand but, surely, is also evidence of recoveries in some of the world s major economic blocs. Indicative of the heightened strength of the domestic economy, New Zealanders travelling offshore rose 13.7% over the same period. Monday March 6 brings us building consents for January. Consents have been trending lower recently. In part this will be a function of a general slowdown in residential activity in Christchurch but we would have thought activity elsewhere would have more than offset this. Apparently not. We are forecasting a moderation in residential construction growth but not an outright downturn so are expecting to see signs of a bounce-back in the level of activity in the January data (at least on a seasonally adjusted basis as January is typically a weak month for consents). GDP pick of 0.6% we will need to see total construction activity rise between 1.0% and 2.0% for the quarter. Tuesday also sees trade date for the month of January. We see the annual merchandise trade balance stuck at around -$3.2 billion. This remains a remarkably good outturn given the ongoing strength in domestic demand and recent difficulties faced by our primary sector exporters. Both exports and imports are expected to be insignificantly different from year earlier levels. In the case of exports, the devil will be in the detail, with meat volumes well down but the impact of rising dairy prices largely offsetting this. Further information on the state of New Zealand s external accounts will be released on Wednesday when the December quarter overseas trade indices are released. We are expecting a 4.6% jump in New Zealand s terms of trade as the recent surge in global dairy prices hits the data. This will see the terms of trade rise to its highest level since December While we are forecasting the NZD to drift lower, the strength in this indicator (both actual and prospective) will continue to minimise any such downside for the remainder of this year. In terms of the accompanying trade volume data, we will be looking for numbers that will be consistent with our GDP pick that goods exports volumes fell 2.1% for the quarter (driven by primary commodities) while goods imports increased 0.8%. We are also looking for a pick up in non-residential consents, which have been disappointing of late. At this early stage consents may be being adversely impacted by delayed decision making following the Kaikoura earthquakes but, in time, consents (and activity) will be bolstered by this event. Indicative of this, Colliers latest survey of the Wellington market shows the city s vacancy rate to be the lowest since December Friday sees the release of Building Work Put in Place data for the December quarter. To be consistent with our Q4 Terms Of Trade Offers NZD Support Index Terms of Trade - OTI Goods BNZ Forecast Source: Statistics New Zealand, BNZ Quarterly

3 The last piece of the external trade puzzle for the week will be the release of ANZ s February Commodity Price Index on Friday. We are looking for a very small (0.3%) increase in the world price index which will convert into a small (0.9%) drop in the NZD Index thanks to the appreciation of the NZD over the period. Other data over the week which will add to the overall picture includes: RBNZ residential lending data (Monday 27th February); RBNZ credit data (Tuesday 28th February); QVNZ house price data (Wednesday 1st March). All of this will help form more of a picture of the state of the housing market. Evidence so far would suggest that the heat is dissipating in both the Christchurch and Auckland markets but remains intense elsewhere. We struggle to believe the market will soften in any meaningful way given the extent of the ongoing migrationled population growth New Zealand is experiencing. The data will also shed more light on how much the housing market is being supported by credit growth (and who is doing the borrowing). Recent data suggest owner-occupiers are taking a greater share of the borrowing as investor activity wanes (in a relative sense). Aggregate credit growth has been accelerating. The extent by which it can continue to do so will be impacted by the banking sector s ability to raise funds. Look for more tension in this space as the year evolves.

4 Global Watch NAB expects 0.9% increase in Aussie Q4 GDP Providing Monday/Tuesday partials don t disappoint US monthly data feast, includes key PCE deflator Trump speaking Tuesday, Yellen/Fischer Friday Developers reducing construction ambitions Australia The market will be turning attention to three things this week. First, how well or otherwise the economy clawed its way back in the December quarter after the disappointing 0.5% q/q contraction in Q3. NAB s forecast is for growth of 0.9%, a little ahead of the consensus of 0.7%, and based on solid household consumption, a rebound in dwelling investment and flat business investment and government spending. Net exports are also likely to have been useful contributor (+0.2 percentage points after -0.2 percentage points in Q3). The 0.9% rise would lift annual growth back up to 2.1% from 1.8% in Q3. (The RBA s forecast is also 2%.) Ahead of GDP comes a further sequence of quarterly partials on Monday and Tuesday. Monday sees the release of the ABS Business Indicators release that includes estimates of non-farm inventories where NAB expects to see a rise of 0.8% in the quarter. The release also has its estimate of gross operating profits for companies and unincorporated businesses with NAB expecting the big uplift in commodity prices to have underwritten higher resource company earnings, NAB expecting that company gross operating profits rose in the region of 13% in Q4. There is also an estimate for the aggregate growth in wage payments for the quarter that, together with profits providing a good insight into the income-based measure of GDP. Tuesday sees the release of the Balance of Payments report together with the Statistician s estimate of government spending with NAB expecting no net growth Investor housing has been accelerating in government spending after a 0.7% contraction in underlying government spending in Q3 (abstracting from the net purchases of second-hand assets by the public sector). The second major focal point for the week will be on further measures of economic activity and prices in the early part of this year. The RBA credit report for January (out Tuesday) will reveal whether the increased tempo of investor housing credit, up to 0.8% in December, accelerated further in January. Faster growth in Business Credit will also be a watch point. The other major monthly releases for the week come on Thursday with January s Trade Balance and Building Approvals. NAB is expecting to see a further enlargement of the monthly trade surplus from $3.5 billion in December to $3.6 billion January. Bulk commodity exports are expected to feature with increases in coal, iron ore, and a further uplift in LNG exports as the production ramp-up from the projects that started operation last year continues. Gold exports could well be lower given Newcrest s reported flooding affecting production at Telfer. Supporting export receipts, the RBA Commodity Price index in January continued rising, up another 4.1% in Australian dollar terms, benefiting from the flowthrough into receipts from the higher evident Bulk commodity market prices through last year. Recent data from the Statistician s monthly Building Approvals survey points to a diminishing pipeline of prospective apartment construction. The AiG PCI Construction of New Orders index points to a small decline in January, a hint that the appetite for new apartment development may have eased back a little further in January. NAB looks for a decline of 2.7% in aggregate Residential Building Approvals after the 1.2% decline in December, centred more likely on apartments.

5 China Focus will be on Wednesday s Official Manufacturing and Non-manufacturing PMIs, the official PMI expected to be little changed at 51.1 (L: 51.3). The Caixin Manufacturing index is out Wednesday and the Services index is Friday. Important political events too with the Chinese People s Political Consultative Conference Friday the body has 2,000 people and may provide a guide to economic benchmarks ahead of the Party Congress later this year. US After New Home Sales and UoM Consumer Sentiment tonight, there s more data focus ahead of payrolls the week after next. Most focus will be on Durable goods (supported by the oil & gas uplift), an expected upward revision to Q4 GDP and January Trade Balance (all Monday), and then focus shifts Tuesday to the Chicago PMI ahead of the more important Manufacturing ISM Wednesday (expect a still solid 56.0 print) and the Nonmanufacturing ISM Friday. The January PCE deflators are out Wednesday, analysts looking for a step up in y/y terms from 1.7% to 1.8%, within sight of the Fed s 2% target. The Fed s Beige Book is out Wednesday and there s more Fed speakers, most interest in Yellen s Friday speaking engagement and whether she will be any more time specific than fairly soon. We doubt it, ahead of payrolls. President Trump s joint session speech to Congress on Tuesday will be noted to see whether his policy priorities remain the same and whether there are any further details. Japan Tuesday s Industrial production and Retail come before Friday s labour market and CPI double header. Eurozone Confidence Surveys tonight, Retail Sales next Friday the main interests. UK The PMIs will be the main interest. Canada Thursday s Q4 GDP the main focus, the market looking for 2.0% in Q4 after 3.5% in Q3. All surveyed analysts expect the Bank of Canada to leave rates on hold.

6 Fixed Interest Market The short end of the local rates market has settled down following the RBNZ s Monetary Policy Statement earlier in the month. The 2-year swap rate has traded within a % range since that release. We think that this level is fair. Stronger paying interest is likely to emerge at 2.30% and lower. And with the high cost of carry and lack of threat to the RBNZ changing rates over coming months, receiving interest is likely to emerge close to the top of that range. The OIS market looks tightly range-bound now and could remain that way for some time. Pricing suggests the market sees little chance of the RBNZ changing rates over the next five OCR dates from March through to September. It seems that the November meeting is the first one with any realistic chance of the RBNZ raising the OCR, with the market currently pricing in a close to 50/50 chance of a hike, which seems fair to us. The week ahead is a busy one on the economic calendar. A plethora of NZ economic data are released but much of it is second-tier. The indicator with the most potential to move the market will be the ANZ business outlook survey released tomorrow. We d take as given that year-ahead inflation expectations will show an increase. It has been going up at a rate of 0.1% per month on rounded figures. With the last survey two months ago, an increase of 0.2% to 1.8% would be in line with the recent trend. Rising inflation expectations and business confidence continuing to run at a healthy clip would keep alive the market s view of the RBNZ possibly moving as soon as November. The following major local release is not until mid-march (when Q4 GDP data are released). The long end of the curve also remains locked in a range. For US 10-year Treasuries, a % range has been in play for a few months. With the NZ-US 10-year spread locked in a tight range over that time, this implies about a % range for NZ 10-year government bonds. On Friday, US10s closed within 2bps of the bottom end of the range, raising the prospect of that range being broken this week. Lower rates appear to be a global phenomenon, with European rates falling alongside US rates. It suggests a common global force. While global economic data have strengthened this year, perhaps the big sell-off in global rates in Q4 last year was just too much. Short positioning in bonds continues to be unwound, with investors nervous of political risk in Europe and Trump not delivering on his big fiscal plans. Trump s mid-week address to the US Congress will be closely watched, but comments from Treasury Secretary Mnuchin this morning don t sound too helpful for seeing some concrete plans on fiscal policy. Trump will touch on tax reform and it looks like the border tax policy still needs a lot of work. Reuters: BNZL, BNZM Bloomberg:BNZ Amidst the plethora of US economic data released this week, the key releases are in the early hours of Thursday morning, which include personal income and spending data, the PCE deflator, and ISM manufacturing indicator. A stronger than expected inflation reading and robust activity indicators could see the market move towards a March rate hike, something that is still priced as a lowerthan-even chance. If that data is strong, then Fischer and Yellen in speeches on Saturday morning have the opportunity to guide the market towards a March hike. We ll see. So in summary, rates markets have shown signs of consolidation this year to date, after the substantial increase in rates late last year. There is a lot of economic news and potential for Trump, Yellen and Fischer to drive market pricing this week. With rates at the bottom of recent ranges, the risk of a break to the downside is possible if Trump s speech lack details on his fiscal plans and there is no smoking gun in the data to raise expectations of a Fed hike next month. Even if that were the case, we d be looking for opportunities to pay fixed rates on any dip in yields. Our medium-term bias is one where rates eventually track higher, supported by a positive growth and inflation backdrop. Rates Markets Range-Bound After Q4 Sell-off NZ swap rates year 1.5 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Source: BNZ., Bloomberg Current Rates/Spreads and Recent Ranges Current 10-year 5-year Last 3-weeks range* NZ 90d bank bills (%) NZ 2yr swap (%) NZ 5yr swap (%) NZ 10yr swap (%) s10s swap curve (bps) NZ 10yr swap-govt (bps) NZ 10yr govt (%) US 10yr govt (%) NZ-US 10yr (bps) NZ-AU 2yr swap (bps) NZ-AU 10yr govt (bps) *Indicative range over last 3 weeks

7 Foreign Exchange Markets Foreign exchange markets have been pretty uneventful over the past two weeks. The NZD has traded in a tight USD range over that time, barely more than a 1 cent range. Meanwhile, our risk appetite index has hovered around a 2½ year high and currently sits at 78% and commodity prices have remained high. Thus, our short-term fair value model estimate has maintained a 0.74 handle for the past five weeks and closed last week at , maintaining about a 3% gap between spot and fair value. We still think that a USD range looks in play for a while yet. Last week NZD/AUD attempted to test the long-standing support level of 0.93 and failed. That makes 0.93 an even stronger support base now, a level that has been in place since May last year. We maintain our view that the AUD range is likely to be in play for several months yet and exporters should be looking to buy dips towards the lower end of the range. The week ahead has the potential to inject some life into the market. The focal point will be Trump s mid-week speech to Congress, which begins Wednesday afternoon NZ time. This morning, Treasury Secretary Mnuchin said that Trump will touch on tax reform in the Congress speech and that Trump remains concerned on some aspect of the proposed border tax. The market is hanging out for some more detail on the path of US fiscal policy. The issues are complicated and there s a reasonable chance that the market is still left hanging for more information post-speech. The week ahead is a busy one on the economic calendar. A plethora of NZ economic data are released but much of it is second-tier. The indicator with the most potential to move the market will be the ANZ business outlook survey released tomorrow. We d take as given that year-ahead inflation expectations will show an increase. It has been going up at a rate of 0.1% per month on rounded figures. With the last survey two months ago, an increase of 0.2% to 1.8% would be in line with the recent trend. Rising inflation expectations and business confidence continuing to run at a healthy clip would be NZD-supportive. Elsewhere, net migration, trade, house prices, terms of trade, building work, credit and other releases would not normally be expected to move the market. The US calendar is also heavy. We d be focused on the data released in the early hours of Thursday morning, which include personal income and spending data, the PCE deflator, and ISM manufacturing indicator. A stronger than expected inflation reading and robust activity indicators could see the market move towards a March rate hike, something that is still priced as a lower-thaneven chance. If that data is strong, then Fischer and Yellen in speeches on Saturday morning have the opportunity to Reuters pg BNZWFWDS Bloomberg pg BNZ9 guide the market towards a March hike, which would be USD-positive. Q4 GDP data due on Wednesday in Australia is the main economic event across the Tasman. A rebound in growth is widely expected after the contraction in Q3. We don t see it as significant enough to knock NZD/AUD out of the now long-standing AUD range. Elsewhere, we ll be watching CPI data for the euro zone and Japan and PMI data in China. For Now, NZD Still in a Trading Range Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Source: BNZ, Bloomberg NZD Still Tracking a Little Below Fair Value NZD/USD Short-Term Fair Value Model NZD/USD Model estimate Source: BNZ, Bloomberg Cross Cross Rates Rates and and Model Model Estimates Estimates Current Last 3-weeks range* NZD/USD NZD/AUD NZD/GBP NZD/EUR NZD/JPY *Indicative range over last 3 weeks, rounded figures BNZ Short-term Fair Value Models Model Est. Actual/FV NZD/USD % NZD/AUD %

8 Technicals NZD/USD Outlook: Downward channel ST Resistance: (ahead of ) ST Support: (ahead of ) NZD/USD Daily Source: Bloomberg The technical picture remains one of a slight downward channel over the past six months. The 50-day, 100-day and 200-day moving averages are all converging around the , so that area is one of strong support. Resistance emerges around , ahead of stronger resistance towards NZD/AUD Outlook: Trading range ST Resistance: (ahead of ) ST Support: (ahead of ) NZD/AUD Daily Source: Bloomberg The currency has spent much of the past 9 months oscilliating in a range. The 0.93 support has strengthened, after last week s test and failure. A break of that level would open up the lower 90s, something we haven t seen for some time. The 200-day moving average of is the first area of resistance. NZ 5-year Swap Rate Outlook: Higher ST Resistance: 3.30 ST Support: 2.91 No change here still key support and expect a move to NZ 5-yr Swap Daily Source: Bloomberg NZ 2-year - 5-year Swap Spread (yield curve) Outlook: Steeper ST Resistance: +88 ST Support: +52 The pullback has been fairly shallow. Stop through +52 and keep target at +88. NZ 2yr 5yrSwap Spread Daily Source: Bloomberg

9 Key Upcoming Events Forecast Median Last Forecast Median Last Monday 27 February NZ, External Migration, January s.a. +6,010 Aus, Company Profits, Q % +8.0% +1.0% Euro, Economic Confidence, February US, Durables Orders, January 1st est +1.7% -0.5% Tuesday 28 February NZ, Household Credit, January y/y +8.7% NZ, Merchandise Trade, January +$50m -$3m -$41m NZ, ANZ Business Survey, February Aus, Private Sector Credit, January +0.5% +0.5% +0.7% Aus, Current Account, Q4 -$2.0b -$4.0b -$11.4b Jpn, Industrial Production, January 1st est +0.4% +0.7% Euro, CPI, Feb y/y 1st est +1.9% +1.8% US, Chicago PMI, February US, GDP, Q4 2nd est +2.1% +1.9%P US, Consumer Confidence, February US, International Goods Trade, January -$66.0b -$64.4b Wednesday 1 March NZ, QVNZ House Prices, February +13.5% NZ, Terms of Trade, Q4 +4.6% +4.0% -1.8% Aus, GDP, Q4 +0.9% +0.7% -0.5% China, PMI (NBS), February China, Non-manufacturing PMI, February 54.6 Germ, CPI, Feb y/y 1st est +2.1% +1.9% Wednesday 1 March cont d UK, Markit/CIPS Manuf Survey, February US, Personal Spending, January +0.3% +0.5% US, Beige Book US, ISM Manufacturing, February US, Construction Spending, January +0.6% -0.2% Can, BOC Policy Announcement 0.50% 0.50% Thursday 2 March Aus, Building Approvals, January -2.7% -0.5% -1.2% Aus, International Trade, January +$3.64b +$3.80b +$3.51b Euro, PPI, January y/y +3.2% +1.6% Friday 3 March NZ, ANZ Job Ads, February -0.2% NZ, ANZ Comdty Prices (world), February -0.1% NZ, Building Work Put In Place, Q4 vol s.a.+1.0% +1.5% +1.4% China, Services PMI (Caixin), February 53.1 Jpn, Household Spending, January y/y (real) -0.3% -0.3% Jpn, Unemployment Rate, January 3.0% 3.1% Jpn, CPI, January y/y +0.4% +0.3% Euro, Retail Sales, January +0.3% -0.3% UK, Markit/CIPS Services, February US, ISM Non-Manuf, February US, Yellen/Fischer Speaking, Chicago Historical Data Today Week Ago Month Ago Year Ago Today Week Ago Month Ago Year Ago CASH & BANK BILLS Call mth mth mth mth GOVERNMENT STOCK 12/ / / / / / / / GLOBAL CREDIT INDICES (ITRXX) AUD 5Y N. AMERICA 5Y EUROPE 5Y SWAP RATES 2 years years years years FOREIGN EXCHANGE NZD/USD NZD/AUD NZD/JPY NZD/EUR NZD/GBP NZD/CAD TWI

10 Contact Details Stephen Toplis Head of Research +(64 4) Craig Ebert Senior Economist +(64 4) Doug Steel Senior Economist +(64 4) Kymberly Martin Senior Market Strategist +(64 4) Jason Wong Currency Strategist +(64 4) Main Offices Wellington 60 Waterloo Quay Private Bag Wellington Mail Centre Lower Hutt 5045 New Zealand Phone: +(64 4) FI: Auckland 80 Queen Street Private Bag Auckland 1142 New Zealand Phone: +(64 9) Toll Free: Christchurch 111 Cashel Street Christchurch 8011 New Zealand Phone: +(64 3) Toll Free: National Australia Bank Peter Jolly Global Head of Research +(61 2) Alan Oster Group Chief Economist +(61 3) Ray Attrill Global Co-Head of FX Strategy +(61 2) Skye Masters Head of Interest Rate Strategy +(61 2) Wellington Foreign Exchange Fixed Income/Derivatives Sydney Foreign Exchange +(61 2) Fixed Income/Derivatives +(61 2) New York Foreign Exchange Fixed Income/Derivatives Hong Kong Foreign Exchange +(85 2) Fixed Income/Derivatives +(85 2) London Foreign Exchange +(44 20) Fixed Income/Derivatives +(44 20) ANALYST DISCLAIMER: The person or persons named as the author(s) of this report hereby certify that the views expressed in the research report accurately reflect their personal views about the subject securities and issuers and other subject matters discussed. No part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research report. Research analysts responsible for this report receive compensation based upon, among other factors, the overall profitability of the Markets Division of National Australia Bank Limited, a member of the National Australia Bank Group ( NAB ). The views of the author(s) do not necessarily reflect the views of NAB and are subject to change without notice. NAB may receive fees for banking services provided to an issuer of securities mentioned in this report. NAB, its affiliates and their respective officers, and employees, including persons involved in the preparation or issuance of this report (subject to the policies of NAB), may also from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as advisors, brokers or commercial bankers in relation to the securities (or related securities and financial instruments), of companies mentioned in this report. NAB or its affiliates may engage in these transactions in a manner that is inconsistent with or contrary to any recommendations made in this report. NEW ZEALAND DISCLAIMER: This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication. Bank of New Zealand strongly recommends readers seek independent legal/financial advice prior to acting in relation to any of the matters discussed in this publication. Neither Bank of New Zealand nor any person involved in this publication accepts any liability for any loss or damage whatsoever may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication. US DISCLAIMER: If this document is distributed in the United States, such distribution is by nabsecurities, LLC. This document is not intended as an offer or solicitation for the purchase or sale of any securities, financial instrument or product or to provide financial services. It is not the intention of nabsecurities to create legal relations on the basis of information provided herein. National Australia Bank Limited is not a registered bank in New Zealand.

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