WELLINGTON, Nov 15 (Reuters) - New Zealand retail sales were stronger than expected in the September quarter as consumers rushed to beat a rise in sales tax, leaving intact market expectations that interest rates will be held steady into next year.
Sales volumes, which strip out price movements, rose a seasonally adjusted 0.7 percent in the three months to Sept. 30, against expectations for a rise of 0.3 percent, official data showed on Monday. It was the sixth consecutive quarterly rise.
Seasonally adjusted sales for the month of September rose 1.6 percent against a forecast rise of 1.1 percent. The government raised its sales tax to 15 percent from 12.5 percent on Oct 1.
The data was the latest pointing to an uneven recovery, with the housing market slowing, households and businesses looking to reduce debt instead of spending and unemployment staying high. that have reported record full-year results.
'I think the Reserve Bank (of New Zealand) will still be looking at March next year for the resumption of the tightening cycle,' said Goldman Sachs economist Philip Borkin.
The New Zealand dollar initially jumped around a quarter of a cent to $0.7770, before settling at around $0.7755. Interest rate futures fell two points.
Financial markets have priced in virtually no chance of a central bank interest rate hike next month, the last review of the year, with the next rate increase seen in March.
The Reserve Bank of New Zealand poured cold water last week on market speculation of a possible earlier rate hike after a surprise improvement in the jobless data saying economic recovery has been tepid and markets were reading too much into the data.
The RBNZ left its cash rate at 3 percent last month, but said that further rate increases would be needed at some stage.
Markets see 75 basis points of tightening from 77 basis points on Friday and 95 basis points earlier this month.
Analysts said the retail sales data would support third quarter growth figures due at the end of next month.
'It's a decent start in adding up the numbers for Q3 GDP, and reduces the risk of it being flat or negative,' said UBS senior economist Robin Clements.
The economy slowed to a scant 0.2 percent in the June quarter from 0.5 percent in the March quarter, but is still expected by the central bank to grow at around 2.7 percent a year for the next two years, driven by exports to Australia and China.
(Reporting by Mantik Kusjanto; editing by Balazs Koranyi)
((mantik.kusjanto@thomsonreuters.com; +64 4 471 4232;
Reuters Messaging: mantik.kusjanto.reuters.com@reuters.net Keywords: NEWZEALAND ECONOMY/RETAIL (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Sales volumes, which strip out price movements, rose a seasonally adjusted 0.7 percent in the three months to Sept. 30, against expectations for a rise of 0.3 percent, official data showed on Monday. It was the sixth consecutive quarterly rise.
Seasonally adjusted sales for the month of September rose 1.6 percent against a forecast rise of 1.1 percent. The government raised its sales tax to 15 percent from 12.5 percent on Oct 1.
The data was the latest pointing to an uneven recovery, with the housing market slowing, households and businesses looking to reduce debt instead of spending and unemployment staying high. that have reported record full-year results.
'I think the Reserve Bank (of New Zealand) will still be looking at March next year for the resumption of the tightening cycle,' said Goldman Sachs economist Philip Borkin.
The New Zealand dollar initially jumped around a quarter of a cent to $0.7770, before settling at around $0.7755. Interest rate futures fell two points.
Financial markets have priced in virtually no chance of a central bank interest rate hike next month, the last review of the year, with the next rate increase seen in March.
The Reserve Bank of New Zealand poured cold water last week on market speculation of a possible earlier rate hike after a surprise improvement in the jobless data saying economic recovery has been tepid and markets were reading too much into the data.
The RBNZ left its cash rate at 3 percent last month, but said that further rate increases would be needed at some stage.
Markets see 75 basis points of tightening from 77 basis points on Friday and 95 basis points earlier this month.
Analysts said the retail sales data would support third quarter growth figures due at the end of next month.
'It's a decent start in adding up the numbers for Q3 GDP, and reduces the risk of it being flat or negative,' said UBS senior economist Robin Clements.
The economy slowed to a scant 0.2 percent in the June quarter from 0.5 percent in the March quarter, but is still expected by the central bank to grow at around 2.7 percent a year for the next two years, driven by exports to Australia and China.
(Reporting by Mantik Kusjanto; editing by Balazs Koranyi)
((mantik.kusjanto@thomsonreuters.com; +64 4 471 4232;
Reuters Messaging: mantik.kusjanto.reuters.com@reuters.net Keywords: NEWZEALAND ECONOMY/RETAIL (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.