New Zealand ANZ Business Confidence had a notable bounce by 12 pts to -38 in September. While’s it’s still a negative reading, it’s already the highest level since May. Own activity index also rose 4 pts to 8.
ANZ noted in the release that It is encouraging that nearly all activity indicators out of the ANZ Business Outlook survey rebounded this month, with only investment intentions deteriorating further. The growth signal coming out of the survey remains weak, certainly. But if the indicators continue to rebound, it will increase the odds that while the economy may have hit a pothole, the wheels are not falling off.
On RBNZ, ANZ said the Reserve Bank made it clear in the August Monetary Policy Statement that they believe the economy needs to accelerate to get inflation sustainably back to the target midpoint in an acceptable timeframe. We expect that at the OCR Review this week the message will therefore continue to be that the next move in the Official Cash Rate “could be up or down”, despite the stronger-than-expected June quarter GDP outturn.
