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Analysts at TD Securities note that New Zealand’s  Jul/Aug average trade balance is on par with recent years, as exports are always seasonally soft during the winter while fuel imports are strong (up 50% compared with last year).

Key Quotes

“Exports of beef and lamb were picking up with decent prices, offsetting the seasonal dip in dairy. The tier 1 indicator for the RBNZ, ANZ Sep business confidence, saw a pickup from -50% to -38% with activity outlook rising from +4 to +8. Inflation expectations eased from 2.2% to 2.1% but still remained on target.”

“The activity pickup is supported by exports which jumped from +8 to +19, but employment remained negative at -1 (although still an improvement from -6) and investment worsened to -9 from -5. Our expectation is that RBNZ’s Governor Orr will focus on the latter and remain dovish tomorrow (9am NZT).”