In its latest Economy Watch report, BNZ economist Stephen Toplis says the "survey is probably strong enough to caution against any further rate cut by the (Reserve) Bank."

Meanwhile another BNZ report out yesterday its economists warned of the need to avoid the temptation of get over-excited about economic recovery.

Its Capital Markets Outlook says that while a turning point now seems clear, there is little to guarantee it will be robust enough "for us all to climb out of the big hole we're in."

"Folk run the risk of getting overexcited," it warns.

It also notes that Reserve Bank governor Alan Bollard has acknowledged the turning point, but was guarded about the economic future. BNZ has sympathy with his view which it believes is designed to "lean against" this over-excitement. Markets are already pricing in official cash rate hikes much sooner than the central bank has suggested

 "As Bollard stated (on Monday morning), the financial markets are free to think what they like - but are also prone to get it wrong on more than the odd occasion. In their eagerness to pick and ride the ups and downs, financial markets ‘don't do stable very well'," the Markets Outlook says.

The ASB Business Weekly report says local market pricing suggests market participants see little chance of another rate cut by the RBNZ and has started to position for rate hikes for early next year, despite the RBNZ's expectation to hold rates until the latter part of next year.

"While the economic outlook is improving, the recovery remains extremely fragile," it cautions.

It also warns that if the RBNZ wants to "contain" the increase in interest rates at the shorter-end of the yield curve, it may need to "ante-up" and make a further rate cut.

The ANZ Market Focus report suggests that with the Australian market looking for the Reserve Bank of Australia to hike rates before Christmas, the pressure will be on yields to increase in NZ.

"We still expect the RBNZ to hold until the second half of next year, and may look to receive should yields break through the top of their range at 4.2%," it says.

It is continuing to favour floating rates as a borrowing strategy, saying this will remain the cheapest part of the curve for some time.

Westpac, meanwhile, still recommends fixing for six months to a year, which it sees as offering the most favourable rates.

"While a strategy of fixing for short terms creates more uncertainty about future cash flows, borrowers can reduce this uncertainty by repaying more than the minimum amount while interest rates are at the lower end of the cycle," it says in its Weekly Commentary.

Read BNZ's Housing Boom Drives Recovery here