Preliminary reading of New Zealand ANZ business confidence improved to 7.0 in May, up from -2.0. Own activity outlook also rose to 32.3, up from 22.2. Export intentions rose to 14.9, from 9.1. Investment intentions rose to 20.8, from 17.1. Employment intentions rose to 22.1, from 16.4. Pricing intentions rose to 57.6, from 55.8. Inflation expectations surged to 2.17, from 1.97.
ANZ said: “Any ECON 101 student or business person can tell you that strong demand and hampered supply is a sure-fire recipe for inflation. The RBNZ can ignore it only as long as inflation expectations remain well-anchored. So far so good; but it’s a lagging, not leading, indicator.”