ASB Commodities report
The CBA NZ Commodity Price Index rose in all denominations last week, boosted by increases in the Dairy, Sheep and Beef series. There was a slight dip in the Forestry series, and a revision to last week's data for the index.
The big news last week was RAIN. Significant rainfall has occurred across south-eastern Australia. The rain is timely for grain growers and will also help pasture growth for sheep, beef and dairy farmers. Some parts have now recorded the best falls for seven years. This is good news for Australian agricultural output going forward.
NZ meat prices look set to resume their seasonal increases, as slaughter numbers begin to decline. Rain in Australia will contribute to lower kill numbers there, as animals are retained to rebuild stock. ABARE reported De-stocking in southern Australia increased at the end of last year, reducing the national sheep flock by 6 percent and the cattle herd by 3 percent.
The major economic release last week was the Government Budget. FX and interest rate markets were unchanged by the release, but strong retail trade data released on Monday saw markets increase the chances of further rate hiking from the RBNZ, and long-term rates rose by 4 to 6 basis points. The NZD continues to trade around USD 0.73, and AUD 0.88. Against the Yen, the NZD continues to trade near the recent highs, at around JPY 88.5.
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