Analysts at TD Securities explained that New Zealand real retail sales jumped by +1.1%/q, smashing even the most optimistic +0.8%/q forecast (mkt +0.3%/q).
Key Quotes:
“11/15 industries expanded in the quarter. After +4.7%/q blockbuster Building supplies, other contributors to the strong result were Food and beverage services (+1.7%/q) and Dept stores (+2.8%/q).
Broad-based strength dilutes concerns about the RBNZ’s well-documented rate cut scenario for now (until the next data point, which is ANZ business confidence, next Thursday). This is a strong building block for Q2 GDP and our tracking is now +0.8%/q (outpacing the RBNZ forecast of +0.5%/q).”
“As Q1 was revised up from +0.1% to +0.3%/q, the consumer was in good shape over H1. The LNG Family Package payments hit bank accounts from 1 July, so we expect a fairly robust Q3. July retail card sales rose by a healthy +0.7%/m.”
“This print gave a tailwind to the NZD but we don’t expect this to be sustained, even though we remain more constructive on the economy than the RBNZ and consensus. The RBNZ is simply offering no incentive to hold NZD just now.”
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