Welcome to the July 13 edition of the BNZ Weekly Overview.
This week we have received data showing that although business confidence remains poor expectations of cost increases
are very high and pricing intentions are well above average. The inflationary implications of these results were
strengthened by today's retail sales number for May being unusually strong. In addition a strong labour market report
across the Tasman today has helped place upward pressure on wholesale interest rates which are now at their highest
levels since December last year. There is clearly some fresh upward pressure on fixed housing interest rates.
The Kiwi dollar has gained almost 1.5 cents against the United States dollar over the past week in response to the
market again getting less optimistic about the timing of monetary policy being eased in New Zealand, riding on the
coattails of the stronger Australian dollar, and traders switching out of Canadian dollars after the Canadian central
bank said they probably won't increase their interest rates any further beyond the current 4.25%.
ENDS