* Retail sales higher, beat market expectations
* Market expects rate rise as early as April
* Kiwi higher after data, bank bills ease
* Manufacturing sector activity up for fourth month
* Consumer confidence at three-year high (Adds PMI, consumer confidence survey)
By Mantik Kusjanto
WELLINGTON, Jan 21 (Reuters) - New Zealand's retail sales rose in November as consumers showed they were much more confident, reinforcing market views that the central bank would raise interest rates from as early as April.
Seasonally adjusted retail sales values rose 0.8 percent from the previous month, official data showed on Thursday, following two straight months of near flat performance. Analysts in a Reuters poll had forecast a 0.5 percent rise.
Core retail sales, which exclude fuel and auto-related sales, also rose 0.8 percent from the previous month, better than market estimates for a 0.2 percent rise. Actual sales rose a bigger than expected 2.4 percent on a year ago.
The release came a day after data showed benign inflation in the fourth quarter, which cooled expectations that the central bank might need to start raising rates from as early as March.
"You have one weak set of data, and one strong set, but the consumer price index is the more important. Overall, the market has shifted its expectations from March out to April. That's the summary between the two," said Westpac senior strategist Imre Speizer.
The New Zealand dollar gained around a quarter of a cent to $0.7223 before settling back around $0.7210/20. Bank bill futures retreated as much as 7 basis points, after rallying the previous day.
Recent data has pointed to a gradually improving economy, but the central bank in its last monetary policy review said it would hold rates until around the middle of 2010 and is expected to repeat that outlook in its next review on Jan. 28.
Two other pieces of data reinforced the view the economy is growing steadily.
The Bank of New Zealand-Business NZ's seasonally adjusted performance of manufacturing index (PMI) showed the manufacturing sector strengthened for the fourth month in a row in December to a two-year high.
The ANZ-Roy Morgan Consumer confidence index also rose to a three-year high in January, with respondents more upbeat about both current conditions and the future outlook.
"The combination of a recovery in housing and prospective peak in the unemployment rate in early 2010 is giving an aura of confidence," ANZ-National chief economist Cameron Bagrie said.
Consumers curbed their spending in the past year in the face of falling property prices, and a deep and protracted recession, which was exacerbated by the global financial crisis.
The Reserve Bank of New Zealand (RBNZ) slashed rates by 575 basis points between July 2008 and April 2009 to a record low 2.5 percent to drive the economy out of recession.
That helped the economy post growth of 0.2 percent in the second and third quarters after five straight quarters of contraction. (Additional reporting by Gyles Beckford and Adrian Bathgate) (Editing by Kazunori Takada)