NZ: Trade surplus wider than expected - TDS

New Zealand’s reported June trade surplus wider than expected at $NZ242m (mkt: $NZ150m) with stronger exports, notes the analysis team at TDS. 

Key Quotes

“For Q2, dairy exports surged 22% and Logs +15%.  Early tracking hints that trade could add up to ½%pt to Q2, and the current account deficit shrinks below 3% of GDP after this export surge.”

“RBNZ McDermott speech was a fizzer compared with market expectations of a “message”.  He commented that the neutral cash rate could be even low at around 3.5%, bearing similarities to the neutral rate discussion raised in RBA’s minutes last week. This is an interesting comparison given that historically the neutral rate in NZ was much higher than Australia due to a stricter inflation target and lower exchange rate.”