Today’s Q3 GDP data show that New Zealand’s recovery is continuing, albeit at a weaker pace than expected. We still expect a sustained and eventually strong upswing. However, the markets have moved too far in expecting a first Reserve Bank of New Zealand (RBNZ) rate hike in March 2010. We have always thought that a mid-2010 starting-point was most likely, and then expect the RBNZ to tighten only gradually. The Kiwi dollar should underperform against the Aussie dollar.