New Zealand retail activity rose in the March quarter
Stats New Zealand data showed retail activity rose 0.8% in the March quarter from the previous quarter. Higher fuel prices supported the headline figure, while food and clothing spending remained subdued. The data is considered a key signal ahead of the RBNZ's July rate meeting.
The report published by Stats NZ showed that the core retail volume also rose 0.3% in the same period. Automotive fuel sales were up 4.2% and motor vehicle accessories rose 2.1%. By contrast, food and beverage sales contracted 0.4%, while clothing and footwear grew just 0.1%.
ANZ Bank chief economist Sharon Zollner said the data 'shows underlying demand is still weak and the headline is being carried by fuel prices'. She added that for a stronger recovery in the second half of the year, signals from the labour market would also need to improve.
The RBNZ cash rate is currently 3.75%. Market swap pricing gives a 60% probability of a 25-basis-point cut at the July meeting. After the data, that expectation slipped to 55%. The equity market reacted in a neutral way; the NZX 50 index closed the session up 0.2%.
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