The New Zealand dollar maintained its lofty levels as the chase continues for high-yields, despite speculation of further intervention by RBNZ. Additionally, global increases in commodities prices, namely dairy products, also supported the rise in the Kiwi.
[B]HEADLINES:[/B]
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[B]Strong Kiwi Eroding New Zealand’s Income From Tourism[/B]
The continual appreciation in the value of the New Zealand dollar versus most currencies is adversely affecting not only exporters of manufactured goods, but also the exports of services, in particular tourism. Though international passenger numbers rose by about 4.5 percent globally last year, the increasingly overvalued Kiwi dollar has forced New Zealand?s tourists to cut down their average duration of stay.
http://www.stuff.co.nz/stuff/4107427a1865.html -
[B]Steady Flow of Economic Data This Week[/B]
As the kiwi dollar remains the star currency for the increasingly popular carry trade, investors anxiously await the release of several indicators of New Zealand?s economic activity as an aid to second-guess RBNZ?s next monetary policy decision. Speculative interest in the New Zealand dollar is likely to remain unaffected by the news of an anticipated decline in the current account deficit and positive quarterly GDP growth rate.
NZ Herald - Breaking news, latest news, business, sport and entertainment - NZ Herald -
[B]Demand For New Recruits Remains Robust In I.T. Sector[/B]
The six-monthly period from June-December 2007 marked the second consecutive time New Zealand?s IT sector remained the most buoyant in terms of staffing plans of employers. The report released by recruitment firm Hudson indicated that a net 68.2 percent of employers in the IT sector intend to hire additional staff. New Zealand?s information technology sector is being kept robust by investment by global vendors, on-going IT projects, as well as IT upgrades in government organizations.
http://computerworld.co.nz/news.nsf/care/B3BBF85AAF6517D4CC2573020013CD43
[B]NEW ZEALAND MARKET ACTIVITY:[/B]
[B]Currency Markets - NZD:
[/B]The New Zealand dollar maintained its lofty levels as the chase continues for high-yields, despite speculation of further intervention by RBNZ. Additionally, global increases in commodities prices, namely dairy products, also supported the rise in the Kiwi. The NZDUSD pair tested the 22-year high of 0.7682 previously reached on June 22, but subsequently eased back below 0.7650. As the currencies of New Zealand and Japan remain the popular choice for carry trades, the kiwi peaked to 95.18 yen during the Asian session, the highest level in more than 19 years. The rally of the Kiwi against the Japanese yen is being largely attributed to aggressive investment by Japanese retail investors. Since the economic calendar for the week is packed with several key economic indicators, focus will remain on any market moving data that may shape the RBNZ?s next policy move.
[I]NZD(Daily Chart)
Source: Bloomberg
[/I][B]Equity Markets - NZSX-50:[/B]
The benchmark NZSX-50 put up modest fight against the spillover effects of Friday?s decline in equity markets worldwide and closed at 4270.91 on Monday, down 14.23 points, or 0.3 percent, after falling 15.42 points on Friday. Credit for NZSX-50?s modest recovery attempt goes to SkyCity Entertainment Group, as the shares of the casino operator rose 3.6 percent upon announcement of resignation of Managing Director Evan Davies. Exporters of manufactured products, such as Fisher and Paykel, continued to suffer losses on the back of the appreciation of the New Zealand dollar.
[I]NZSX-50 Index (Daily Chart)
[/I][I]Source: Bloomberg[/I]
[B]Fixed-Income Markets - New Zealand?s 10-year Government Bonds:[/B]
The yield on the benchmark 10-year government bond declined 1 basis point to 6.75 percent. The government debt market remains unsteady amid speculation of further currency market intervention by the Reserve Bank of New Zealand.
[I]New Zealand Government Bond (Daily Chart)
Source: Bloomberg
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