Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: gregor_us who wrote (729)	2/26/2004 11:49:38 AM
From: mishedlo	Read Replies (1) of 116555

BNZ WEEKLY OVERVIEW release Attached you will find the latest edition of the BNZ Weekly Overview from Chief Economist Tony Alexander. [Mish note: Those interested in investing in NZ$ or bonds should take a good look at the PDF] The key points of this week's publication include the following. 1. An examination of data on car registrations, dwelling sales, and retail spending shows growth in the domestic New Zealand economy is slowing. Added to the pullback already evident in exports this will · limit the extent to which the Reserve Bank needs to tighten monetary policy further, · make more likely a falling NZ dollar over the second half of the year, and · limit the extent of the potential hard landing from late this year. 2. The NZ dollar has fallen about 1.5 cents from a week ago due to some return of strength in the greenback. But with a tightening of United States monetary policy still some time away the NZD looks highly likely to rise back over 70 cents in coming weeks before the cyclical decline eventually gets underway ? perhaps by mid-year. 3. In our housing section we show that if you want insight into where the nationwide real estate industry's activity levels will be going then look at what is happening in Otago. The Weekly Overview is freely available to all BNZ staff, customers, and the public with a centralised EMAIL ONLY distribution list managed here. If you wish to add, change or delete an email address please reply to this message or email tony.alexander@bnz.co.nz. Sections of the WO may be reproduced by anyone other than mortgage brokers provided the BNZ is noted as the source. Best Regards Tony Alexander Chief Economist Bank of New Zealand 04 474-6744 Snip on interest rates from the PDF: INTEREST RATES There has been little change in wholesale interest rates in New Zealand over the past week with no great lead coming from offshore. The 90-day bank bill yield ended the week up a tad near 5.6% from 5.58% a week ago while the ten year government bond yield ended near 5.85% from 5.82%. This tiny weakness at the long end of the curve came about in response to an early-week sell-off in the US bond market following the rise in the USD. That sell-off was in response to the factor we have warned about in the past – namely a rising dollar causing foreign central banks to refrain from buying USDs and therefore exiting the US bond market causing yields to potentially rise sharply. Late week weakness in the USD has pushed that scenario on to the back burner again but it is worth keeping an eye on for those people who may be contemplating investment in long term fixed interest securities. There is a risk of capital loss beyond the two year term over 2004. ======================================================== OOPs - the PDF was an attachment so I can not post a link Those wanting to play NZ should consider emailing tony.alexander@bnz.co.nz get on the list and ask for todays and future reports

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