Trading at its highest levels since it was floated in 1985; kiwi continues to rip higher on the back of speculation of an RBNZ rate hike next week with NZDUSD currently at 0.7967. Traders maintain positive sentiment for the New Zealand economy citing low unemployment, upbeat immigration, and of course high lending rates as bullish signals for NZD.
Monthly Visitor Arrivals Slide To 14-Month Low
RBNZ?s attempts to curtail domestic demand may be finally coming to fruition as a Statistic New Zealand report indicated a drop in the annual immigration growth rate to a 14-month low. The rate of growth of permanent migrant arrivals per year has been on the decline since November, boosting anticipations of a decline in demand for capital and consumer goods.
Credit Card Transactions Continue Strong In June
The Reserve Bank received additional confirmation of the strength of domestic demand as consumer spending on debit, credit and store cards in June advanced by the steepest rate in six months. Total billings for June increased by 1.9 percent on a seasonally adjusted basis, a significant rise compared to the 5.5 percent gain in May.
Source: The New Zealand Herald
Fonterra Predicts Billion Dollar Gains for Dairy Farmers
As the boom in world dairy prices continues in full swing, New Zealand?s largest dairy company Fonterra predicted an earnings increase of as much as a cumulative NZ$ 1 billion for its 11,600 farmers.
Currency Market - NZD:
Trading at its highest levels since it was floated in 1985; kiwi continues to rip higher on the back of speculation of an RBNZ rate hike next week with NZDUSD currently at 0.7967. Traders maintain positive sentiment for the New Zealand economy citing low unemployment, upbeat immigration, and of course high lending rates as bullish signals for NZD. Heading for its fifth weekly gain, strong yield appetite continues to add steam to the pair as carry traders find cheaper rates in Japan yielding 0.5 percent and take advantage of the kiwi?s generous yield.
Equity Market - NZSX-50 Index:
Wellington equities advance 0.6 percent this session, reaching the bell at 4320.27. Trading in the New Zealand benchmark NZSX 50 saw highs of 430.27 before settling at its close. Meanwhile, borrowing rates of 8.25 are becoming more apparent approaching the July 26th RBNZ meeting as Allan Bollard and company are forecasted to tighten rates 25 basis points. Lifting the index higher were shares in the countries largest building products maker Fletcher Building (FBU.NZ) which contributed 2.5 percent. Closing at NZ$12.73 on upbeat 2007 profit guidance from Citigroup, the stock has appreciated 2.9 percent since the revised profit forecast.
Fixed-Income Market - 10-year Government Bonds:
Managing to avoid the risk aversion seen in European and US markets on Friday, yields on the long New Zealand government bond ticked up one basis point to 6.861. Fundamental traders have a bevy of data on the docket for next week as the RBNZ meets to debate the current state of monetary policy and figures on the official trade balance are released.