2012.05.28 04:17:17 MARKET TALK: RBNZ Should Cut But Faces Several Barriers - TD

0217 GMT [Dow Jones] The Reserve Bank of New Zealand should cut the cash rate as "dairy prices have collapsed, home sales are bumping along at low levels, consumer spending collapsed after the RWC crowds went home, and inflation continues to slide towards 1%," says Annette Beacher, head of Asia-Pacific Research for TD Securities. However, she notes three barriers to a cut: RBNZ Governor Alan Bollard leaves his post in September and wouldn't want to do anything until the handover; the massive Christchurch rebuild remains on the horizon; and the NZD has fallen sharply since the RBNZ hinted that any rate cut was tied to the strong currency. As a result, the RBNZ should "lay as low as possible" at its June 14 review, she says. A clear dovish tone along the lines of "the inflation outlook allows for easing should that prove necessary," would leave short and longer bond yields lower for longer and keep a lid on the NZD, she adds. (rebecca.howard@dowjones.com) Contact us in Singapore. 65 64154 140; MarketTalk@dowjones.com (END) Dow Jones Newswires May 27, 2012 22:17 ET (02:17 GMT)