NZ’s terms of trade remain at a 40 year high after rising further in the December quarter. Export prices are lingering at high levels, with the added boost to the terms of trade in the December quarter largely due to softer import prices. Today’s data also showed a big jump in export volumes, largely reflecting stronger dairy exports as the sector rebounded from the effects of last summer’s drought.We think the terms of trade will moderate over the course of 2014, but remain bullish about the outlook for New Zealand’s terms of trade over a medium term horizon.
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Westpac