Positive Surprises Emerging
IMF: Reserve Bank’s money printing improved the Government’s books - a little https://www.nzherald.co.nz/business/...EJPAWMSTTJJJQ/
"Don't fret! Inflation is going away," says Orr.
Aiming for Surplus will beget a stronger NZD
Quote:
Originally Posted by
stoploss
Ok currently .5907 , I think it goes lower yet , wait till we see the Govt books ahead of the election .
$4 billion of budget cuts... would be banked to offset deficits... to keep debt under 30% of gross domestic product and return the Crown accounts to surplus... This money would not be available to be reallocated into new initiatives. https://www.interest.co.nz/public-policy/123988/finance-minister-grant-robertson-said-money-saved-would-help-offset-growing
I'll be buying again long before 0.565.
Quote:
Originally Posted by
Daytr
Yeah I think it might head towards 0.5650 so will keep an eye on it for a re-entry level.
The current balance of payments means there is a constant sale of NZD every month.
The US will peak at some point, probably relatively soon. The US also seems to be ahead of NZ in the fight against inflation so the FED may pivot before NZ.
By strengthening the USD, higher US interest rates stimulate other economies’ exports. This makes the kind of global recession that so many predicted even less likely.
If you take away the reason for "flight to safety = USD", and NZ exports are becoming more competitive due to currently weaker NZD, you have a surprise building for NZD shorters.
Govt opens the books - Not quite as gloomy as people expected
Quote:
Originally Posted by
stoploss
Ok currently .5907 , I think it goes lower yet , wait till we see the Govt books ahead of the election .
ANZ also concedes with a surprise that economic outlook has had a small upgrade...
https://www.goodreturns.co.nz/articl...or+12+Sep+2023
Yet another positive surprise
ANZ Truckometer monitoring threw up something of a surprise result - there was a "late winter flurry" of activity, belying the doomsters.
Not only was that seen in more car traffic, the commercial traffic "rebounded" sharply in August from July.
https://d321bl9io865gk.cloudfront.ne...22:%22star%22}
Record Migration good for NZ, NZD
A record number of migrants is one factor that might keep interest rates higher for longer.
https://businessdesk.co.nz/article/economy/rise-in-migrants-may-help-keep-interest-rates-high?utm_source=nzh&utm_medium=referral&utm_campai gn=nzh-home
Might gap up sharply on open if clean win
Quote:
Originally Posted by
Daytr
So we could be in limbo for a week or two whilst negotiations are going on with Winston. Already priced in?
Definitely some element of that in NZD performance in the last three days, as NZD suffered more than most other currencies versus USD.
Also, USD benefitting as safe haven temporarily due to the raging Israel- Palestine War
So, volatility in the near term if horse trading happens, but the long term is UP :)
1 Attachment(s)
Looks mere election uncertainty volatility to me
Quote:
Originally Posted by
winner69
Maybe 55 is on cards next week ….bad week this week
Attachment 14788
Range-bound volatility exhibiting in the near-term chart, despite a black swan (Israel-Palestine War started over a week ago).
Probably a NZD gap up open on Monday, and beginning of reversion to mean - once National Government confirmed in 3 weeks...
Risks: Iran, Hezbollah or Saudi martial involvement in MidEast War theatre - not just political posturing and noise!
CPI dropped back to a lower-than-expected 5.6% in Sept qtr
Quote:
Originally Posted by
beacon
Kiwibank Chief Economist Jarrod Kerr sees it at 55c by Christmas 2023. He might want to review his Target Price up though, seeing that the ANZ World Commodity Price Index gained 1.3% in September (ANZ chief economist Sharon Zollner's note out today) after trending lower for the previous three months. The lift, although modest, was BROAD_BASED with ALL MAJOR SECTORS, except horticulture, lifting.
https://watermarker.singletrack.io/A...Headers%3Dhost
New Zealand is finally “winning the war” on inflation, Kiwibank chief economist Jarrod Kerr says, "no more rate hikes needed"
https://www.nzherald.co.nz/business/...DAQ6UH42OMYUQ/
Further rate hikes look to be off the table. The chance of any further rate hike dropped from around 84% to 40%, according to BNZ Bank's head of research, Stephen Toplis. A first-rate cut is now priced in for February 2025, a few months earlier than previously.
https://businessdesk.co.nz/article/e...paign=nzh-home
A strengthening economy can't have a weakening currency (for long).
We'll learn to live with it
Quote:
Originally Posted by
winner69
Inflation is here to stay for longer than we want.
Tech is deflationary, and so is immigration. Oil flared up due to Israel action, but pressure building on Israel to cease fire.
Back home also, record migration continues - which is deflationary. https://www.interest.co.nz/economy/1...nths-september
Inflation is no longer the only game in Town.
Despite the current jawboning, Reserve Banks around the world are looking for an excuse to cut. A strong USD is hurting everyone, including I suspect the US, and refinancing interest rates are beginning to bite global borrowers harder - including in US.
Fed done hiking rates: Reuters poll
Quote:
Originally Posted by
beacon
Those high interest rates are hurting, so he (or US Fed, for that matter) should NOT be raising rates further at all
Attachment 14795
A slight majority still see a cut before the middle of 2024
https://www.reuters.com/markets/us/f...on-2023-10-18/
Fed's Waller: can wait on data to decide on rate path
https://finance.yahoo.com/news/feds-...160244333.html
In a strong signal that the Federal Reserve won't raise interest rates at its next meeting, Fed Governor Christopher Waller, one of the Fed's most hawkish policymakers, said he wants to "wait, watch and see" ... "Should the real side of the economy soften, we will have more room to wait on any further rate hikes and let the recent run-up on longer-term rates do some of our work."
Powell soothes the markets
Quote:
Originally Posted by
beacon
Powell must choose his words well tonight and in the next few weeks, lest they prove to be the proverbial "last straw"...
Forecasters generally expect gross domestic product to come in very strong for the third quarter before cooling off in the fourth quarter and next year...
Given the uncertainties and risks, and how far we have come, the Committee is proceeding carefully. We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks (which are many, as he acknowledged in his speech today).
https://www.federalreserve.gov/newse...l20231019a.htm
After some knee-jerk reactions either way, calm returning to FX markets. USD Index down, G10 FX up - with AUD, NZD lagging others - but up from their last night lows nevertheless. Rationality and calm should prevail when what he said (and didn't say) gets digested. He can't crack the economy to get Inflation under (an arbitrary red line) 2%
NZD back up above .58, thanks to consumer confidence
The latest ANZ-Roy Morgan consumer confidence survey shows optimism about the economy rising...
Expectations for the housing market were the strongest in almost two years...
https://www.nzherald.co.nz/business/...IOKWZUK5WI56E/