"With the Reserve Bank nearing the end of its easing cycle, short term rates are unlikely to fall significantly further, while long-term rates will continue to anticipate the next tightening cycle," it says.

While it is widely expected that the official cash rate (OCR) will remain at 2.5% at the July review the market has a 25% chance of a rate cut priced in, according to ASB's Business Weekly report.

"Nonetheless, we expect that the RBNZ will take time to pause and assess the impact of rate cuts to date. With the economic outlook still fragile, we continue to see scope for further rate cuts, possibly in September and October," it maintains.

ANZ economists continue to favour sticking to floating rates, or alternatively, going for a series of short fixes.

"Floating rates remain the cheapest part of the curve, and rate hikes still look to be at least 12 months away," it says.

"Consideration can also be given to the use of options as a way to hedge further out," it suggests.

The BNZ Capital Markets Outlook describes NZ dollar interest rates as having had a "choppy" week, with little overall direction to push the market.

"The three-month bill remains in a tight range around 2.80%, while the Overnight Indexed Swaps and futures curve continue to price only a slight chance of a further cut to the OCR, with the first hikes priced for early in 2010," it says.

Economists from all four of these banks have their eyes firmly turned this week to Thursday's release of the Consumer Price Index (CPI) for the June quarter. The market is expecting this to increase by 0.5%, dropping annual CPI inflation to 1.8% from 3%.

icks from economists at these four banks range from a 0.3% quarterly increase and a 1.6% annual inflation rate, to a 0.8% quarterly rise and a 2.1% annual figure. Either way, there is a good chance it will end up back in the middle of the 1% - 3% target inflation band, a sight rarely seen in the last five years.