AUDNZD - Five Year Lows

[blackcap]

Retail sales even stronger if you back fuel sales out (they were down). The extra cash consumers had might have had them buying more laptops, furniture, and meals out etc. but at th end of the highest even of spending for many years

More to the economy than dairy prices daytr - over time there is very little (if any at all) correlation between dairy prices and economic growth in nz

Im sorry but I may have contributed to this one.. bought a laptop just last week. And I ride a bike when I can so do not consume so much fuel.

[winner69]

Im sorry but I may have contributed to this one.. bought a laptop just last week. And I ride a bike when I can so do not consume so much fuel.

Don't be sorry mate ....good you helping retail sales booming as well as keeping fuel use down

Well done

[winner69]

best presented article I have read in a long time.
http://www.interest.co.nz/opinion/75...stify-ocr-cuts

Basically says the economy is doing well and there is no reason to cut rates at the next RBNZ meeting.
I expect the $ to strengthen against the AUD once all the jaw boning has settle down and the simple facts make up the equation

He a good guy that Rodney Dickens

Truly independent and not swayed by the views of the popular bank economist / commentators who seem to have an agenda to drive and take a rather myopic view of things.

Rodney has worked in the RBNZ as well as for a bank. I think he saw the error of his ways so went out on his own.

[PSE]

best presented article I have read in a long time.
http://www.interest.co.nz/opinion/75...stify-ocr-cuts

Basically says the economy is doing well and there is no reason to cut rates at the next RBNZ meeting.
I expect the $ to strengthen against the AUD once all the jaw boning has settle down and the simple facts make up the equation

The export economy is damaged by the high AUD, this is reason enough to cut rates if a solution on slowing house prices is found. I am not impressed by the latest attempts though.
http://i.stuff.co.nz/business/money/...r-restrictions

[DarkHorse]

I stumbled on an extremely interesting little article on the NZD-AUD cross from an American (?) currency trader's perspective. It's his favourite macro trade. Amazing to see how closely correlated the AUD-NZD rate and performance of Emerging v Developed markets are - with obvious implications for asset allocation. Well worth a read!
http://seekingalpha.com/article/3186...-and-nzd?ifp=0

[Daytr]

I'm sorry Winner69, your data is very selective & makes the figures extremely flattering to reality.
Q1 2014 was a very poor quarter whereas q12015 was a very good quarter.
Correct me if I'm wrong here you are saying sales were up 7% year on year by comparing Q1 2014 to Q1 to 2015?
That's not a year on year comparison.

From NZ Stats. "March was a boom quarter for retailers, Statistics New Zealand said today.
The total sales value was $19.3 billion in the March 2015 quarter, almost $1 billion (5.1 percent) more than the previous March quarter. Fuel retailing, down due to lower prices, was the only retail industry to have lower sales.
After removing the impact of price changes, total retail sales volumes rose 7.4 percent in the March quarter compared with the same quarter last year."

No doubt retail sales have been steadily growing when the NZ economy has been in a substantial growth mode underpinned by property prices, export prices & National's increased government debt program to fund road building. Retail sales is a lagging indicator obviously and two of the growth industries being diary & forestry are now not what they were.

Here is probably a much fairer reflection from NZ Govt stat. Under what they term is 'Key facts'.

Key facts
For the March 2015 quarter, compared with the December 2014 quarter (seasonally adjusted):

• The total volume of retail sales rose 2.7 percent – the largest percentage increase since December 2006. In dollar terms, it was a record increase since this series began in September 2003.
• All 15 industries had higher sales volumes.
• Electrical and electronic goods retailing recorded the largest volume increase, up 8.9 percent.
• The total value of retail sales rose 1.7 percent.

Comparing March quarter this yearvv March quarter last year. Actual sales and non of this seasonally adjusted stuff

Fuel sales were down $176m (impact of lower pump prices)

All other sales were up $1.108m ($1.1 billion) or 7% more than last year last year

So plenty saved on fuel but heaps more than what they saved was spent on other things.

The average quarterly increase (over prior year) in core sales has been about 4% - the 7% (close to 6% if we assume that savings from fuel was spent on treats and shouldn't be counted) in March is much stronger than that. I say really strong

Or are we arguing different things?

[Daytr]

My view is we have had a very healthy clear-out in an extremely overweight trade, i.e. long NZD / short Aussie. The jawboning worked to great effect. Now that it has cleared out & seems to be settling down I would suggest NZD strength returns, albeit perhaps relatively short term. I have no doubt that the NZ economy will weaken over the next six months or so. Obviously there has been a flood of foreign money into the property market, although I expect this to continue, it may slow some with things like National's largely ineffectual CGT. Foreign property ownership is becoming a political hot potato & I think we are likely to see further actions around the fringes at least from Government.
And then there will be the impact of lower export prices, which effectively means less NZDs are bought to convert from USD.
Let alone the impact that lower prices will have on spending from the rural sector.
If the NZD looks like approaching parity again, we are likely to see the same jaw boning from the RBNZ.
Will the economy slow enough to lower rates? Perhaps, but its certainly not a foregone conclusion.

best presented article I have read in a long time.
http://www.interest.co.nz/opinion/75...stify-ocr-cuts

Basically says the economy is doing well and there is no reason to cut rates at the next RBNZ meeting.
I expect the $ to strengthen against the AUD once all the jaw boning has settle down and the simple facts make up the equation

[Daytr]

Why did the Kiwi just pop higher half a cent? I see banks dropped rates, but that's in anticipation that the RBNZ may drop rates next month.

[winner69]

Why did the Kiwi just pop higher half a cent? I see banks dropped rates, but that's in anticipation that the RBNZ may drop rates next month.

RBA Minutes came out ..... more rate cuts very likely according to the traders

[Daytr]

Thanks. Amasing Aussie unchanged & Kiwi jumps half a cent on an AUD announcement.
Just shows how speculatively driven the Kiwi is driven at the moment with the yield available.
I'm long NZD/AUD cross as of yesterday, so happy days indeed.