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NZ Q2 GDP To Contract Next Week?


Early doors the ANZ Truckometer indicator printed for August, rising an impressive 7% m/m. This is the largest monthly rise since September last year, with the rebound likely reflected easing labour supply constraints according to ANZ. Still, the bank notes that with downside revisions to history it will be touch and go as to whether the economy grew in Q2 or not. This data is out next Wednesday.

  • There is no consensus estimate for the Q2 print at this stage, although recall Q1 growth fell by -0.2% q/q, so another fall in Q2 would put NZ in recession, at least based off the 2 consecutive quarters of negative growth rule. Yesterday’s manufacturing activity data for Q2 also showed a contraction.
  • Given we are already in September this may not impact sentiment too much, particularly with signs that the economy is doing better in Q3 but worth being mindful of the risk as we head into next week.
  • Note coming up shortly is card spending data for August. Total spending was -0.2% down in July.
  • For NZD/USD we tracked a rough 0.6030/0.6080 range post the Asia close (last 0.6060). Dips were supported in the pair as equity sentiment was positive in US/EU markets, despite higher core yields.
  • The VIX finished sub 24%. NZD/JPY is not too far off recent highs, last at 87.20.

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