New Zealand’s ANZ business outlook survey hits five-month highs, fueling expectations for further RBNZ rate increases by year-end.
The New Zealand Dollar strengthened against major currencies as domestic economic data improved, with local bonds underperforming. The ANZ July business outlook survey showed business confidence surging 19.5 points to 56.1, while activity outlook rose 12.4 points to 49.3, both five-month highs.
Above-target inflation and a recovering GDP outlook support expectations for additional Reserve Bank of New Zealand rate hikes. The swaps curve now prices in 60bps of tightening by year-end and 100bps over the next 12 months, lifting the policy rate to 3.50%, near the top of the RBNZ’s estimated neutral range of 2.20%-4.10%.
The stronger data reinforced NZD’s gains, with the currency rising against all major peers.