Earlier on today we got conflicting statements out of New Zealand that sent the NZD on a bit of a quick ride

Yep, amateur hour in NZ ....

I posted a preview of the NZ GDP data due this week here earlier:

Data is due Wednesday 19 September at 2245GMT

  • Which is Thursday morning local time in NZ

For Q2, or second quarter, economic growth

  • expected 0.7% q/q, prior 0.5%
  • expected 2.5% y/y, prior 2.7%

Posting this next preview, via

BNZ:

  • Our estimate for Thursday's Q2 GDP is for an increase of 0.6% (on the cusp of rounding to 0.7%).
  • The market is looking for 0.7%, with a couple of the local banks plumping for 0.9%.
  • Our below consensus call is not a nod to recently weak business confidence. Rather, it reflects transitory hits, notably around energy output.
  • More generally, we think GDP is holding up reasonably well, and is on course for at least trend rates of growth over the second half of 2018.

More

  • It's after this that things get cloudy. As capped as Q2 GDP growth might prove to be, it seems unlikely to fall materially short of the RBNZ expectation of a 0.5% gain. Still the composition of growth could be important for judging the demand and supply dynamics in the economy. But also watch for some historical revisions to NZ GDP over recent years. This relates to the upgrades to annual services exports that Statistics NZ recently published. This is something to also bear in mind for Wednesday's Balance of Payments accounts. Upwardly revised lines for services exports will help contain the annual current account deficit to 2.7% of GDP, in our view, even though the deeper undercurrents are shifting toward an expanding deficit. The market expects the external deficit to edge out to 2.9% of GDP for the year to June 2018. We'll also be perusing the current account's exports and imports results, to see if/how they gel with our 0.6% view on Q2 GDP growth.