In July 2025, the New Zealand Business Services Index (BSI) stood at 48.9. This marks an increase from the previous index figure of 46. <\/p>\n
The previous figure for June 2025 was later revised upward from its initial value of 46 to 47.3. This suggests an improvement in business services performance over the period observed.<\/p>\n
The recent New Zealand Business Services Index, which rose to 48.9 for July 2025, suggests the downturn in the services sector is easing. Although the index remains below the 50-point mark indicating contraction, this improvement from the revised 47.3 prior shows a slowing decline. We see this as a sign that the sector may be approaching a bottom after a prolonged period of weakness.<\/p>\n
This better-than-expected data reduces the immediate pressure on the Reserve Bank of New Zealand to cut the Official Cash Rate from its current high of 5.50%. Given that the Q2 2025 inflation rate was still stubborn at 3.4%, the RBNZ will likely wait for more conclusive evidence of a slowdown before signaling any policy pivot. Therefore, we should consider pushing out expectations for rate cuts, possibly adjusting interest rate swap positions to reflect a first move in Q1 2026 rather than late 2025.<\/p>\n
For the New Zealand dollar, this development is moderately supportive, especially against currencies where central banks are more dovish. A delay in RBNZ rate cuts increases the NZD’s yield advantage. We could look at buying short-dated NZD\/AUD call options, as the cross has been consolidating around 0.9250 and this data could provide a catalyst to break higher.<\/p>\n
This slight improvement in services, combined with the manufacturing PMI which also showed a modest lift to 47.8 last month, paints a picture of a stabilizing economy. While not a signal of strong growth, it does lower the tail risk of a deep recession that had been priced into the market earlier in 2025. This may warrant cautiously selling out-of-the-money put options on the NZX 50 index, as underlying corporate conditions appear to be troughing.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" New Zealand\u2019s Business Services Index rose to 48.9 in July 2025, signaling gradual performance improvement.<\/p>\n","protected":false},"author":62,"featured_media":16996,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29203","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=29203"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16996"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=29203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=29203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=29203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}