Consider NZGB calls as a way to get long

Data Flash (New Zealand)

Consider NZGB calls as a way to get long

* We believe that too much is priced into the forwards.

* The appreciation of the NZD is approaching levels where it could begin to have a material impact on the profile for the cash rate going forward.

* We believe that the front end of the New Zealand curve can rally from current levels.

* While this is our central view, a sharp change of interest rate sentiment in the US is perhaps the major risk. Therefore some investors may prefer to implement the trade via options.

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