ANZ Market Focus says for now it thinks the market is probably right to take a downbeat view, although there is always the risk of an upside surprise.

"But to the extent that the yield curve is steepening up, increasing the cost of long term borrowing and raising the hurdle to investment, the Reserve Bank can afford to sit back for awhile."

J.P.Morgan Weekly Prospects says with consumers saving more and spending less, the retail sector has suffered with yesterday's retail sales showing an outright fall in sales values in December and a drop in volumes in 4Q.

"Having been stuck in this holding pattern since exiting recession, the New Zealand economy is badly in need of an external catalyst to growth," says J.P.Morgan.

ASB Economic Weekly is also concerned that yesterday marked the death of the monthly retail sales release as from now on Statistics NZ will only publish retail sales on a quarterly basis.

"Our concern is that by making it slightly harder to get a sense of what is happening in the economy there is a greater chance of economic policy mistakes."

ASB says as an example, the quality of the Household Labour Force Survey seems to be reducing of late with one quarter employment reported as up sharply and then as falling.

It says the sharp lift in employment reported in May 2010 likely contributed to the Reserve bank's decision to lift the OCR in June 2010 by falsely reinforcing the perception that the economy was vigorously bouncing out of recession.