FINWIRES · TerminalLIVE
FINWIRES

New Zealand Consumer Confidence Bounces in May, Says ANZ Research

By

Consumer confidence in New Zealand rose 6 points in May to 86.5, tracking a small uplift, although the index remained 21 points lower than its January peak with Wellington remaining the most downcast region, ANZ Research said Friday.

According to the ANZ-Roy Morgan Consumer Confidence Index, inflation expectations fell to 5.3% this month, compared with 6.6% in April, while house price expectations declined 0.7 percentage points to 2.6%.

The firm's best retail indicator, which is the net proportion of households thinking it's a good time to buy a major household item, jumped 5 points to negative 20.

It said the bounce in consumer confidence is possibly linked to the modest drop in petroleum prices in May, but confidence remains broadly in line with levels seen before the Middle East conflict, as higher petrol prices continue to weigh weekly budgets with ongoing concerns about the broader economic outlook.

"The outlook for global oil prices remains very clouded, leading to uncertainty around inflation, interest rates and the labor market," analysts at ANZ commented.

The firm expects the central bank to return the Official Cash Rate to neutral at around 3% in July.

Related Articles

International

TSX Closer: The Index Closes Higher For The First Time Since Monday's Record Close

The Toronto Stock Exchange closed higher on Thursday, its first winning session since Monday's record close, with the resource-heavy index buoyed by improved commodity prices, a continuing belief among investors that equity market fundamentals are strong, bullish comments from Canada Prime Minister Mark Carney in New York and cautious positivity on the economy from the Bank of Canada.The S&P/TSX Composite Index closeds up 105.65, or 0.3%, to 34,517.70, having lost more than 400 points over the prior two days. Sectors were mixed, with Info Tech up near 2.6% and Base Metals up 2.3%, helped by a higher gold price. In contrast the Battery Metals Index was down 1.15%, Energy eased near 0.5% despite a modest rise in the oil price, and Financial lost 0.8% even as The Canadian Press reported the 'Big Six' banks see reasons for optimism while navigating a 'period of volatility'.Sluggish trade negotiations between Canada and the United States are finally showing faint signs of life as a milestone looms for renewal of their three-way trade deal with Mexico, CBC News reported on Thursday. The minister responsible for Canada-U.S. trade, Dominic LeBlanc, is planning to travel to Washington, D.C., for trade talks, although his spokespeople haven't confirmed a date, the report noted. Although the Canada-U.S.-Mexico Agreement (CUSMA) is due for its first-ever joint review on July 1, LeBlanc has held just one day of in-person talks over the past seven months with his Trump administration counterpart, U.S. Trade Representative Jamieson Greer, he also noted.That report came out as Prime Minister Mark Carney prepared to pitch Canada as an investment hub at New York's Economic Club at lunchtime today.Employing U.S. President Donald Trump's marquee slogan, PM Carney told a New York City business crowd "Canada strong will help make America great again", reported CTV News. It noted the P.M. detailed his economic diversification strategy, and his plans to recalibrate Canada's relationships and reputation. "We're focused on what we can control, and that means weaving a dense web of international partnerships abroad. That's making us a much stronger, more resilient, more independent country," Carney told the business crowd.Meanwhile, the Bank of Canada on Thursday said Canada's financial system has functioned well through a challenging year as households and businesses remain in stable financial condition, and banks have strengthened their capacity to absorb shocks.However, vulnerabilities have increased in some parts of the system, noted the central bank in its annual Financial Stability Report (FSR). Stock and corporate debt valuations have risen and are high relative to historical norms, the central bank said, adding this makes markets more vulnerable to a sharp correction.The Canadian Press is reporting that Canada's major banks say they're cautiously optimistic as their latest earnings beat expectations, with executives confident they're well equipped to handle potential risks in the Canadian economy. The Big Six grew their profits in the second quarter compared with the same three-month period a year ago, while also posting results above analysts' forecasts, the report noted. Five of those; Toronto-Dominion Bank (TD.TO), Royal Bank of Canada (RY.TO), Bank of Nova Scotia (BNS.TO), Bank of Montreal (BMO.TO) and National Bank of Canada (NA.TO) each hiked their quarterly dividend, it also noted.And while executives expressed confidence in their ability to withstand economic challenges ahead, they also acknowledged macroeconomic concerns that could shift their outlooks, according to the report. Those include the U.S.-Iran war that continues to drag on, pushing international oil prices and inflation higher. High unemployment in Canada and ongoing uncertainty over trade with the United States also cloud the outlook, they said.Of commodities, West Texas Intermediate crude oil closed with a small gain, but fell off early highs following reports the U.S. and Iran agreed to extend their ceasefire even as they earlier traded strikes. WTI crude oil for July delivery closed up US$0.22 to settle at $US$88.90 per barrel after earlier touching US$92.52. July Brent oil was down US$0.64 to US$93.65.Gold was higher midafternoon Thursday, rising off its early lows as the dollar and yields fell after reports the United States and Iran have agreed to extend a ceasefire for 60 days, lowering oil prices and easing inflation worries even a key U.S. inflation measure rose in April. Gold for July delivery was up US$52.50 to US$4,4,534.00 per ounce, after earlier touching US$4,395.60.

$^GSPTSE$.GSPTSE$$CXY$BMO.TO$BNS.TO$CM.TO$NA.TO$RY.TO$TD.TO
International

Federal Reserve Watch for May 28: Inflation Remains Concern, Fed Officials Say

Fed Vice Chair Philip Jefferson (voter) said that he remains focused on bringing inflation down to the 2% goal but would not comment on the future path of monetary policy, saying that he is taking a meeting-by-meeting approach.Fed Governor Lisa Cook (voter) said that she is prepared to raise interest rates if inflation remains elevated but said that she is expecting inflation to slow without rate increases.St. Louis Fed President Alberto Musalem (nonvoter) said that inflation remains a concern and that returning inflation to the 2% goal is still a priority. Musalem was cautious about the role that productivity could play in lowering inflation.Recent comments of note:(May 22) Fed Chair Kevin Warsh (voter) was sworn in, saying that he intends to be reform-oriented and abandoning old models that were not serving the Fed's mission.(May 22) Fed Governor Christopher Waller (voter) suggested that the Fed's policy rate could remain on hold for some time, indicating that the risks are tilting back toward inflation. Waller also said that a rate increase is possible if inflation remains high rather than comes back down.(May 21) Richmond Fed President Tom Barkin (nonvoter) said that he expects supply shortages and economic uncertainty due to the Middle East conflict could eventually have an impact on consumer spending but said that so far consumers are seeing higher prices as temporary.

International

Daily Roundup of Key US Economic Data for May 28

The second estimate of Q1 GDP showed a 1.6% gain after a 0.5% increase in the previous quarter, but a downward adjustment from a 2% gain in the advance estimate.Personal spending growth was revised down 1.4% from a 1.6% increase in the advance estimate, below a 1.9% increase in the previous quarter.There were also negative adjustments to nonresidential fixed investment and inventories that were partially offset by upward revisions to residential fixed investment and net exports. Government spending growth was unrevised.The GDP price index rose by 3.5%, revised down from a 3.6% gain in the advance reading, with the overall PCE price reading unrevised at a 4.5% gain and core PCE price reading revised up slightly to a 4.4% increase from 4.3% in the advance estimate.Personal income was flat in April, below expectations after a 0.5% gain, while personal consumption expenditures rose by an as-expected 0.5% in April after a 1% increase in March.After an adjustment for a 0.4% increase in the PCE price index, real consumption was up 0.1% in April after a 0.3% increase in March. The year-over-year rate for the overall price index accelerated to 3.8% from 3.5%Core PCE prices rose by 0.2% in the month after a 0.3% gain while the year-over-year rate accelerated to 3.3% from 3.2%.Durable goods new orders rose by 7.9% in April, while shipments increased by 0.5%.Excluding transportation, new orders were still up 1.1%, and shipments rose by 0.5%, suggesting underlying strength in demand.New-home sales fell to a 622,000 annual rate in April from a 663,000 rate in March and was down 11.3% from the 701,000 pace in April 2025.Initial jobless claims increased by 5,000 to 215,000 in the week ended May 23, lifting the four-week moving average by 6,250 to 209,000.Insured claims rose by 15,000 to 1.786 million in the employment survey week ended May 16. Insured claims were at a level of 1.776 million in the employment survey week ended April 18.Natural gas stocks rose by 92 billion cubic feet to 2.483 trillion cubic feet in the week ended May 22, up 0.9% from a year earlier and 6.2% higher than the seasonal average for the current week over the previous five years.Total crude oil inventories fell by 12.4 million barrels in the week ended May 22, with commercial oil inventories down 3.3 million barrels and stocks in the US Strategic Petroleum Reserve down 9.1 million barrels. Gasoline inventories and distillate inventories both decreased last week.The Q2 GDP nowcast estimate from the Atlanta Fed is for a 3.8% gain, revised down from the previous estimate of a 4.3% gain.