Strong near-term fundamentals and steady investor appetite for high-yielding currencies boosted the New Zealand dollar against majors across the board. The strength of the Kiwi was cemented by a raft of positive economic news - robust world economy, surge in prices of global commodities, and strong public spending - as heightened security concerns had little impact.
[B]Headlines:[/B]
- [B]RBNZ?s Fears of Inflation Unmitigated By Economic Data[/B]
Last week?s economic calendar was heavy with the release of fundamentals including data on electronic retail cards spending, consumer confidence, merchandise trade balance, the quarterly current account, business outlook and GDP. Despite evidence that inflation may remain contained within RBNZ?s target band of 1 to 3 percent, the Reserve Bank is widely expected to continue implementing anti-inflationary measures.
NZ Herald - Breaking news, latest news, business, sport and entertainment - NZ Herald - [B]Auckland Property Sale Price Inflation Appears to Halt[/B]
Median price growth for residential units sold in Auckland appears to have hit a plateau after a period of steady increases, possibly due to sentiment that the housing boom is nearing an end. Nevertheless, a comparison of the real-estate market in different cities in New Zealand suggests a general upward trend in housing prices across the country since 2002.
Rising Sales Keep Lid On Median Price -- Crockers | Scoop News - [B]RBNZ?s Policy Decisions Remain Under Scrutiny
[/B]The June 11 foreign exchange market intervention by the Reserve Bank of New Zealand has been criticized for its failure to stem the Kiwi?s rise to post-float highs. As the parliamentary finance and expenditure committee examines the monetary policy mechanism, critics are debating whether RBNZ?s focus on the price stability objective may in turn solve all other economic woes.
http://www.stuff.co.nz/4115446a1865.html
[B]Market Activity:[/B]
[B]Currency Markets - NZD:[/B]
Strong near-term fundamentals and steady investor appetite for high-yielding currencies boosted the New Zealand dollar against majors across the board. The strength of the Kiwi was cemented by a raft of positive economic news - robust world economy, surge in prices of global commodities, and strong public spending - as heightened security concerns had little impact. As a result of widening yield differentials between New Zealand and US government debt, the Kiwi dollar extended its gains to a 22-year record high of 0.7758 cents against the US dollar. New Zealand?s currency continued to rally against the Japanese yen, rising to 95.22 yen from 95.18 yen on Friday.
[I]NZDUSD(Daily Chart)
[/I]
[I]Source: Bloomberg[/I]
[B]Equity Markets - NZSX-50:[/B]
A lackluster performance by the US and European equity markets on Friday dampened the activity of the benchmark NZSX-50 index, which closed down 6.28 points, or 0.1 percent, at 4228.01. Turnover for the first trading day of the month amounted to NZD 108.5 million and losses outnumbered gains 52 to 36. The rise of the Kiwi dollar to new 22-year records against the US dollar affected export-related companies such as Fisher & Paykel Appliances, down one cent to NZD 3.47.
[I]NZSX-50 Index (Daily Chart)
[/I][I]
Source: Bloomberg[/I]
[B]Fixed-Income Markets - New Zealand 10-year Government Bonds:
[/B]Demand for conservative government debt remained inflated as global risk appetite has taken a hit during a time of uncertainty over the aftermath of the US subprime mortgage debacle and the London terrorism scare. The yield on the benchmark 10-year government bond slid 0.01 percentage point to 6.699 percent.
[I]New Zealand 10-year Government Bonds (Daily Chart)
Source: Bloomberg[/I]