New Zealand?s currency market tumbled under the influence of the NZIER?s quarterly business opinion survey that indicated a drop in sentiment to a one-year low. However, the Kiwi dollar may stage a comeback during the remaining part of the week on account of the hawkish tone of central bank rhetoric across the globe.
- [B]Second-Quarter Business Confidence On the Decline
[/B]The dampening impact of high interest rates and a strong Kiwi dollar on New Zealand?s business sector was apparent in the Q2 NZIER business opinion survey released Monday. Pessimistic sentiment prevails over the short-term - second quarter business confidence dropped to a one-year low as 37 percent of companies predicted a decline in business conditions over the next six months. Bloomberg - Are you a robot?
-[B] New Zealand-China Free Trade Agreement to Be Complete By Mid-2009
[/B]A comprehensive free trade agreement between New Zealand and China - economies currently exchanging a trade volume exceeding NZD 5 billion - is expected to be drawn up by mid-2009. New Zealand, the first Western country to recognize China as a market economy, was selected by China as the first developed nation to enter into negotiations of an extensive FTA.
Breaking News, World News & Multimedia - The New York Times
- [B]NZD 19 Million in Funding For Food and Beverage Exports Sector[/B]
New Zealand?s Economic Development Minister Trevor Mallard announced government allocation of NZD 19 million in funding for development of the country?s food and beverage sectors for export. The food and beverage sector is of importance to New Zealand?s economy given that half of the exports of the trade-oriented economy are food products, and that the sector employs a fifth of the labor force.
NZ Herald - Breaking news, latest news, business, sport and entertainment - NZ Herald
[B]Currency Market - NZD:
[/B]New Zealand?s currency market tumbled under the influence of the NZIER?s quarterly business opinion survey that indicated a drop in sentiment to a one-year low. The impact of the surge in the Kiwi dollar during June was apparent by the survey that showed 37 percent of companies predicted deterioration in business conditions over the next six months. The decline in business sentiment implies that annual economic growth rate will range between 2 to 2.5 percent, well below RBNZ?s June forecast of 2.9 percent. Influenced by fundamentals against the case of further interest rate hikes, the Kiwi dollar fell from 0.7807 USD before the release to 0.7748 US dollars at 5:05 p.m. in Wellington. The Japanese yen made a notable comeback against the New Zealand dollar after a minor unwind in carry trades - the kiwi slid 0.7 percent against the yen to 96.36 yen, down from 96.51 yen in Asia on Monday. New Zealand?s currency tumbled against Australian dollar to AUD 0.9033 from AUD 0.9091.
The Kiwi dollar could stage a comeback during the remaining part of the week on account of the hawkish tone of central bank rhetoric across the globe.
[I]NZDUSD (Daily Chart)
[B]Equity Market - NZSX-50 Index:
New Zealand?s stock market remained static Tuesday as the benchmark NZSX-50 Index lost 1.80 points to close at 4236.85 on a turnover of NZD 159.5 million. Equities did not respond to the release of the Q2 NZIER Business Opinion Survey that indicated listless quarterly business sentiment and expectations of lower corporate earnings in Q3. Leading the gains among winning stocks was NZ Oil and Gas, up 8 cents to a one-year high of 124, bolstered by continual spikes in global oil prices and development of new oil exploration sites. Auckland Airport stock declined 3 cents to close at 325, as share price of the blue chip stock took a hit from uncertainty over bidders vying for acquisition as well as fee disagreements with airports.
[I]NZSX-50 Index (Daily Chart)
[B]Fixed-Income Market - 10-year Government Bonds:
Investor demand for government debt remained subdued and yields on New Zealand?s benchmark 10-year notes rose to 6.777 percent from 6.757 percent yesterday. The trend in yields supports speculation that the worldwide bull market in government bonds is approaching an end in the backdrop of a global inflationary environment that necessitates interest rate hikes across economies.
[I]New Zealand 10-year Government Bonds