It their Weekly Overview they put their revision down to the signs of stabilisation appearing in the New Zealand economy, one of the factors behind which was the improvement in net migration figures, with many New Zealanders choosing to either stay put, or come home.

However, Westpac acknowledges there are still risks lurking out there for the economy, including the high dollar; longer-term interest rates pushing up; swine flu; and the risk of another "round of upheavals" in global financial markets.

"But in our minds, these are not enough to justify further rate cuts as a central view."

It also predicts rate hikes are likely to be in the latter part of 2010, as the Reserve Bank itself has signaled, rather than early 2010 as markets are pricing in.

Meanwhile, BNZ Capital's Markets Outlook states that the market still believes there is a "small chance" of a further cut to the OCR. It says the 90 day bank bill track is forecast to be very flat to the end of the year after which hikes are priced in.

Its report also notes the "stabilising tones" from the latest Quotable Value NZ house price index. But it believes house prices remain overvalued from a long-term metric perspective, despite the correction seen already.

In its Business Weekly report, ASB holds strong to its view that the last of the OCR cuts may not have been seen. It says the longer that interest rates and the NZ dollar remain above the RBNZ's assumptions, the greater the pressure it will feel to make further cuts and "remind the markets of its position".

"We have penciled in two 25 basis point cuts for September and October, although the timing of these are partly dependent on the NZ dollar. Currently, risks are pointing to a cut in July should the market continue to doubt the RBNZ's easing bias," it states.

ANZ's Market Focus is also sticking to its favoured strategy of staying with floating rates. It believes further cuts are unlikely, but hikes are still a long way off.

"With hikes being prematurely, in our view, priced into the curve; you will be paying a premium to fix at current levels."