-Phil Borkin, ANZ Bank
New Zealand's trade surplus shrank more than expected in June as the value of both imports and exports slipped. Auckland's trade surplus reached $127 million in June, nearly matching the $128 million forecast by economists, state-run Statistics New Zealand said in a report. June was the sixth consecutive trade surplus for the country. The surplus widened to $358 million in May, the highest in more than a year. In annualized terms, New Zealand had a deficit of ¬3.3 billion, official data showed. In May, the year-over-year deficit was $3.6 billion. Data also showed that the value of imports fell to $4.13 billion last month from $4.21 billion in May, that was revised from $4.22 billion , a 4.6% year-on-year decline, but matching economists' expectations for $4.13 billion. Meanwhile, the value of exports declined to $4.26 billion from $4.56 billion in May, that was revised from $4.57 billion and slightly ahead of forecasts for $4.22 billion. Exports were up 2.6% from June last year.
New Zealand's economy expanded at a steady pace in the first quarter, but is facing strong deflationary pressures. Weak inflation has resulted in several rate cuts by the Reserve Bank of New Zealand. Market participants expect the RBNZ to lower interest rates to new all-time lows later this year.
© Dukascopy Bank SA