ANZ survey: NZ business confidence eases to +52 as oil rise hits late responses

For the Reserve Bank of New Zealand, the key message is that inflation expectations did not move as oil prices jumped, which ANZ described as encouraging while stressing it is early. Against that, wage expectations edged up and ANZ says spare capacity may be getting used up faster than the central bank assumed in its recent Monetary Policy Statement, a mild upside risk to its wage forecasts. The weaker late-month activity readings suggest the oil price rise is starting to weigh on sentiment, which could temper the case for tighter policy. New Zealand dollar and rates traders will be watching whether the late-month softness persists in the October survey. --- New Zealand firms stayed cautiously upbeat in September, but activity readings weakened once oil prices spiked, while inflation expectations held at 3.25%. Summary: ANZ's September survey showed business confidence easing by around 2 points to +52, while expected own activity held steady at +48. Reported past activity fell 5 points to +11. Inflation expectations were steady at 3.25%, cost expectations rose 1 point to a net 82% of firms expecting higher costs, and pricing intentions eased 3 points to a net 48%. Responses received after oil rose sharply later in the month showed lower activity indicators, with own activity outlook falling to +36 in late responses from +52 early in the month. Manufacturing was the strongest sector for confidence at +79, with retail and services the weakest in employment and activity measures. ANZ's next Business Outlook is due on October 29. Inflation indicators were little changed. Inflation expectations for a year ahead held at 3.25%, cost expectations rose 1 point to a net 82% of firms expecting higher costs, and pricing intentions eased 3 points to a net 48% expecting to raise prices. Firms expect costs to rise by around 2.6% over the next three months, and wage expectations for the next 12 months edged up to around 2.8% from 2.6%. The timing of responses matters. Most were rec