CIBC Research discusses NZD outlook and adopts a tactical bullish bias going into year-end.

"The RBNZ may be on hold for now, but we still expect the Bank to ease again sometime in mid-2020, as growth forecasts appear too optimistic in light of regional business sentiment. In addition, anticipated changes in bank capital legislation that should come into effect in April 2020 will likely tighten credit conditions, thereby reducing the effects of past cuts. Despite a more dovish RBNZ in the medium-term, we are constructive on the NZD heading into the end of the year. Positioning in NZD is extremely short, and a less dovish Bank will likely lead to a position squeeze going forward. Based on excessive short positioning, we continue to see the NZD as an outperformer in the coming months," CIBC adds.