Research Team at TDS, suggests that New Zealand’s Dec quarter retail sales rose +1.2%/qtr, a robust result but short of mkt +1.5% as 12/15 sectors improved with Fuel and Building driving the gains. Key Quotes “RBNZ 2yr inflation expectations fell sharply to 1.63%, just shy of the record lows set in June 1994. The NZD was hit and NZGBs rallied, but the move seems outsized. NZ PM John Key comments got some airplay, in particular his surprise that the NZD had not fallen in line with the 10-20% decline in dairy prices over recent weeks. The comments were well timed, ahead of what is expected to be a weak dairy auction tonight. NZ’s Finance Minister Bill English also made some comments today on NZ Banks reviewing lending to farmers (Fitch kept ratings unchanged) but caused few ripples.” For more information, read our latest forex news.