CURRENCY: The clock continues to tick as the Greek PM faces the Economist Telephone: +64 4 802 2199 confidence vote this morning. Topside moves for the NZD today should continue to be difficult to sustain given the uncertainty offshore.

RATES: A very quiet night for kiwi rates in the London session, although Telephone: +64 9 309 8500 bids were pulled after news of another large Christchurch aftershock. Local

rates are likely to open unchanged. MARKET SNAPSHOT REVIEW (07:15 NZ TIME)

CURRENCY: Relatively tight trading ranges for all currencies have been Level Change seen over the last 24 trading hours. Mild topside attempts for the NZD have NZD/USD 0.8115 ? 0.0034 continued to struggle around the 200 hour moving average. NZD/AUD 0.7652 ? 0.0001

GLOBAL MARKETS: Markets were more stable overnight and had a AUD/USD 1.0601 ? 0.0041 modestly upbeat tone on an expectation that the Greek Government EUR/USD 1.4413 ? 0.0120 confidence vote will pass. The weaker dataflow did not get much reaction USD/JPY 80.11 ? -0.1400 from markets. US and European equities rose, with most of the gains late in GBP/USD 1.6241 ? 0.0068 the European session. Government bond yields rose, with the US 10-year CRB Futures 338.1 ? 2.1 yield at 2.98 percent at the time of writing. Greek and Portuguese bond Oil Futures 93.70 ? 0.44 yields and CDS spreads eased. Commodity prices rose 0.5 percent led by soft Gold 1545.90 ? 5.95 commodity prices, crude oil prices were broadly unchanged. DJIA 12205 ? 124

S&P 500 1297 ? 18

KEY THEMES AND VIEWS NASDAQ 2687 ? 57 GREEK VOTE THIS MORNING. Ahead of tomorrow?s FOMC announcement all S&P VIX 18.4 ? -1.6 eyes will be on the Greek parliament?s vote (9am this morning NZ time). US 2 year 0.38 ? 0.00

US 10 year 2.98 ? 0.03 Voting is expected to be close, but with the opposition having already

supported fiscal austerity and asset sales market implications are limited.

Nevertheless, the Greek debt crisis needs to be remedied given the risks this KEY DATA RELEASES poses to the European banking system. Sovereign debt is not just a European

Releases Act. Exp. Last issue. Overnight S&P reiterated there is a 1 in 3 chance it will cut the US US Existing Home -3.8% -5.0% -1.8% sovereign debt rating in the next few years.

Sales ? m/m ? May

DOVISH MPC COMMENTS. The speech from MPC member Fisher initially US Existing Home 4.81M 4.80M 5.00M Sales (ann.) ? May weighed on the GBP. While Fisher conceded the MPC had probably UK Public Sector Net �15.2B �16.5B �7.7B underestimated the inflation risks, he reiterated it would be hard to argue Borrowing ? May that monetary policy should have been set differently. Inflation is likely to EZ ZEW Survey (Eco. -5.9 +6.1 +13.6 Sentiment) ? Jun stay above the bank?s 2 percent target in 2011 and 2012, and while GE ZEW Survey (Eco. -9.0 -3.0 +3.1 policymakers were attuned to upside inflation risks, the Bank does not see Sentiment) ? Jun GE ZEW Survey 87.6 90.0 91.5 conclusive evidence that inflation expectations are rising. If anything, Fisher (Current Situation) is more wary of deflation than the ?alternative?. Further, Fisher said that ? Jun weak domestic growth would push down on inflation, and that the Bank could CA Leading Indicators +1.0% +0.5% +0.9% ? m/m ? May consider more quantitative easing if inflation fell too quickly. Fisher won?t be CA Retail Sales ? m/m +0.3% +0.4% -0.1% in the rate hike camp anytime soon. ? Apr CA Retail Sales (Ex- 0.0% +0.6% -0.2%

OTHER EVENTS AND QUOTES Autos) ? m/m ? Apr ? A magnitude 5.3 aftershock hit Christchurch late last night.

The main jolt was 10km west of Akaroa, with no reports of significant damage.

Releases Time Exp. Last Geonet recorded a series of smaller aftershocks this morning. NZ Current Account 10:45 -0.90B -3.52B ? Most of the 3.8 percent monthly fall in US existing home sales in Balance - NZ$ ? Q1 May, to a six-month low of 4.8m, may have been due to unusually severe AU Westpac Leading 12:30 - - +0.5% Index ? m/m - Apr weather. The share of distressed sales fell to a 12-month low, implying NZ Credit Card 15:00 -- +1.6% less downward pressure on prices. Nothing yet to sway the FOMC. Spending ? m/m -

May

ANZ Morning Brief / 22 June 2011 / 2 of 4 CURRENCY OUTLOOK AND MARKET TABLES

NZDUSD: Tightening up?

The shortest day may well see the narrowest range were it not for the release of the NZ Q1 Balance of Payments this morning and the Greek confidence vote. Topside gains however will still be difficult to sustain in this environment as uncertainty on many fronts remain. Expected range: 0.8080 ? 0.8150

NZDAUD: Please repeat?

RBA meeting minutes released yesterday highlighted the current position remains comfortable. While markets saw this as a reason to take this cross back up it was not able to break through 0.77AUD. It continues to complete a technical formation and may well ease lower after today?s local data. Expected range: 0.7612 ? 0.7698

NZDEUR: Poseidon adventure?

The journey continues for the people of Greece as they await the confidence motion today. With little choice but to accept the EU/IMF ultimatum it appears a matter of time before things capsize there. At this point this cross is easing further towards support tests. Expected range: 0.5620 ? 0.5660

NZDJPY: Barely moving?

Comments yesterday from Japanese officials that the USD/JPY moves are reflecting the delay in the USD recovery should be seen as a green light to buy JPY. This however may not see a significant drop in this cross as support remains around 64.39. Expected range: 64.39 ? 65.40

NZDGBP: Gone fishing?

Comments overnight by BoE officials that further QE cannot be ruled out did nothing to help the fortunes of the GBP. It however did lift this cross marginally and may see another attempt at recent highs. Expected range: 0.4990 ? 0.5025

CURRENCY EQUITIES NZ INTEREST RATES

Range USD NZD Level Change Level Change

EUR 1.4315-1.4421 1.4413 0.5628 DJIA 12205 124 OCR 2.50 0.00

JPY 80.06-80.24 80.11 65.01 S&P 500 1297 18 90 day bill 2.68 0.01

GBP 1.6168-1.6244 1.6241 0.4995 NASDAQ 2687 57 15/04/2015 3.91 -0.02

CHF 0.8408-0.8452 0.8402 0.6817 FTSE 5775 82 15/05/2021 4.97 -0.04

CAD 0.9714-0.9791 0.9718 0.7885 Nikkei 9460 105 1 yr (S) 2.87 -0.01

AUD 1.0555-1.0619 1.0601 0.7652 Shanghai A 2773 26 2 yrs (S) 3.33 -0.01

NZD 0.8096-0.8146 0.8115 --- MSCI World 1282 1 3 yrs (S) 3.73 -0.02

TWI 69.94-70.35 --- --- NZX 50 3460 -8 4 yrs (S) 4.04 -0.02

5 yrs (S) 4.30 -0.02

COMMODITIES AND CREDIT 7 yrs (S) 4.69 -0.02

Level Change 10 yrs (S) 5.04 -0.02

Oil futures (US$/bbl) 93.7 0.44

Oil - Brent (US$/bbl) 112.86 -0.19

Gold (US$/oz) 1545.90 5.95 AU INTEREST RATES US INTEREST RATES

CRB Futures Index 338.1 2.15 Level Change Level Change

Baltic Dry Index 1409 -9 Cash rate 4.75 0.00 Fed Funds 0.25 0.00

iTraxx Europe (bps) 107.5 -3.5 90 days 5.05 0.00 3 mth libor 0.25 0.00

iTraxx US (bps) 95.8 -3.7 3 yr bond 4.71 0.00 2 yr bond 0.38 0.00

iTraxx Australia (bps) 113.0 -3.5 10 yr bond 5.14 0.04 10 yr bond 2.98 0.03

ANZ Morning Brief / 22 June 2011 / 3 of 4 IMPORTANT NOTICE