The outbreak of coronavirus in China - New Zealand's biggest trading partner - could have a far-reaching impact, local economists say.
China's growth rate came to 6.1 per cent in 2019 - the lowest annual rate for 29 years - and economists said the outbreak was certain to hit growth in the first quarter of 2020.
The prospect of still lower economic growth in the China has already hit the "hard" commodities, with oil prices falling 10 per cent since the outbreak.
China has reported that the coronavirus has claimed 25 more lives, taking the death toll to at least 106.
More than 4000 people have been infected across China, the bulk of them in and around Wuhan, where the virus first emerged.
Those commodities directly connected to China's economic growth - coal and iron ore - were expected to take a hit, and Australia's big mining stocks BHP, Rio Tinto and Fortescue fell in response, later bouncing off their lows.
For New Zealand's "soft" commodities - dairy and meat - the impact is likely to be less direct.
Nevertheless, those stocks with exposure to China - Fonterra, a2 Milk, Comvita, Tourism Holdings - all weakened.
Some economists had expected the Reserve Bank's official cash rate (OCR) to level out at the current 1.0 per cent, but the outbreak could change that.
ASB Bank economists said the New Zealand economy remains well placed, but that the Reserve Bank should remain vigilant.
In the near-term, the coronavirus represents something of a game-changer for financial markets, it said.
"Already, the economic impact on China looks like it will be severe and the virus is far from contained," the bank said.
"Having gone off the idea of more OCR cuts over recent months, the market is now moving to price them back in, with a 25 basis cut close to fully priced in over 2020," it said.
The Reserve Bank's next review of the rate is due at the release of its monetary policy statement on February 12.
The already soft New Zealand dollar has dropped by about US1c over the last two days as international investors seek out safe haven currencies such as the Japanese yen.
Meat Industry Association chief executive Tim Ritchie said he expected the food service industry would feel the brunt as Chinese authorities clamped down on people congregating.
That would have an impact on Chinese hot-pot restaurants, which formed a big part of the success of New Zealand's sheepmeat trade.
"I hope the authorities get on top of this quickly and stop the contagion," Ritchie said.
"That is of absolute importance to us."
China is New Zealand's biggest market for both sheepmeat and beef.
Mark Lister, head of private wealth research at Craigs Investment Partners, the outbreak had potential flow-on effects for economic growth, tourism and consumer sentiment.
But he said the response on sharemarkets here and around the world had to be taken against the background of record high levels last year.
"The market has been very fragile to any bad news."
BNZ economist Doug Steel said the lower currency would help to insulate the effects on the export trade to some degree.
"With parts of China being shut down, and with a whole lot of production and earning not happening, activity will be curtailed," he said.
"That lowers growth and spending will be down," Steel said.
"You usually see that come through in commodities prices.
"We have got to see how things pan out. You would imagine that the news will get worse before it gets better."
ANZ said the outbreak presented downside risk to both meat and dairy prices in the near term and that the Kiwi dollar was likely to remain under pressure.