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Needle Still Points South


Yields Bounce as Equities Make New Monthly Highs


Heading North


Bull Rally Accelerates


Economists Survey Raises 2021 CPI Forecast To 4.9%

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ASB note that "Q2 GDP managed a massive 2.8% climb in Q2, suggesting that the heady pace of momentum had strengthened prior to the current community COVID-19 outbreak and the economy was on the cusp of overheating if it was not already doing so. The opening of the trans-Tasman bubble looks to have provided a sizeable boost to the Q2 readings on a number of fronts. The Q2 figures now look increasingly dated in light of subsequent events and a near-term hit to Q3 GDP looms. Uncertainty remains, but it is our hope that the NZ economy will quickly bounce back after the community outbreak is brought under control and restrictions eased, with a Q4 rebound looming. In our view the RBNZ will look through the near-term disruption caused by the outbreak and the path of least regrets still necessitates some removal of monetary stimulus. A gradual series of 25bp OCR hikes beckon, starting from October."