FXStreet (Bali) – Stabilisation (and even improvement) has been a developing theme in New Zealand fundamentals of late, notes ANZ.
Key Quotes
“Only last week we saw our Truckometer post a decent bounce in September, ECT data highlighting a better quarter for retail spending in Q3 and dairy prices rose further from their August trough.”
“While headline confidence within the QSBO did weaken, the guts of the survey pointed to a reasonable backbone for the economy, with firms’ domestic trading activity rising and hiring and investment intentions remaining well above historical averages.”
“Without overplaying this, given the risk profile facing the economy (the global scene is still fragile and the stronger NZD has modestly tightened monetary conditions of late), this stabilisation is encouraging – it means that the pace of GDP growth could well lift a tad from the disappointing 0.3% average quarterly rate seen over the first half of the year.”
“We also believe it is consistent with our expectation that the RBNZ will pause for reflection at its OCR Review later this month.”
“That said, much is still likely to hinge on this week’s CPI data for Q3 (released on Friday), with our Monthly Inflation Gauge today for September set to help us firm up our expectation for the key nontradable element of the CPI. At its September MPS, the RBNZ projected nontradable inflation of just 0.1% q/q.”
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