New Zealand GDP: Quarterly rise 0.6% (2.5% annual/a beat kiwi rallies 20 pips)

New Zealand Q1 GDP has been released in line with expectations.

The market was expecting a 0.6% quarterly rise (2.4% annual). The prior was 0.6% quarterly (2.3% annual).

The data arrived as follows:

Quarterly rise 0.6% (2.5% annual/a 0.1% beat).

"Key partial Q1 indicators have been a mixed bag: solid but slowing retail sales volumes, modest wholesale trade, very strong building work, but soft ex-primary manufacturing. We are likely to see a very weak per capita GDP outturn, as Statistics NZ’s new methodology for estimating net migration suggests the population grew strongly in Q1. We can expect more volatility and greater revisions in per capita GDP as a result of the very large revisions evident in reported net migration for the best part of a year under the new methodology," analysts at ANZ Bank explained.

About the Gross Domestic Product

The Gross Domestic Product released by the Statistics New Zealand is a measure of the total value of all goods and services produced by New Zealand. The GDP is considered as a broad measure of New Zealand economic activity and health. Generally speaking, a high reading is seen as positive (or bullish) for the NZD, while a falling trend is seen as negative (or bearish) for the NZD.

FX implications

The NZD will find some support on the data being in line on the quarter but higher on the yearly and has rallied 20 pips to 0.6556 on the knee jerk.

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