The New Zealand dollar burst higher during the US session, hitting new 25 year highs of 0.7874 before working lower to trade within a tight range below 0.7825. Economic data remained light, hence making the New Zealand currency market more dependent on overseas news and commodity price action.
- [B]ANZ Commodity Price Index Rises 7.2 Percent[/B]
Prices for seven of the thirteen commodities measured by the ANZ commodity price index increased, as the overall index registered a 7.2 percent increase compared to the previous year. Reduction in European Union subsidies and a drought in Australia led dairy prices to rise by 13 percent on a year-on-year basis.
- [B]Export Sector Takes a Hit from Strong Kiwi[/B]
The strength of the New Zealand dollar as this year?s best performing currency is adversely affecting the country?s export sector, forcing manufacturers to either shut down plants or relocate production overseas. Despite the RBNZ?s reassurance that intervention is an ongoing process?, the Kiwi dollar?s rise has exporters questioning the role of the Reserve Bank in safeguarding objectives other than price and exchange rate stability.
Breaking News, World News & Multimedia - The New York Times
-[B] Employee Confidence Suffers as Employment Growth Expected to Stall
[/B]The Westpac-McDermott Miller employee confidence index remained above 100 - indicating that optimists outnumber pessimists - but declined to 128.4 in the second quarter from 131 in the first quarter of 2007.
[B]Currency Market - NZD:[/B]
The New Zealand dollar burst higher during the US session, hitting new 25 year highs of 0.7874 before working lower to trade within a tight range below 0.7825. Economic data remained light, hence making the New Zealand currency market more dependent on overseas news and commodity price action. The calendar for next week contains four prominent fundamentals that will determine the RBNZ?s next policy decision - house prices (July 8), NZIER business opinion (July 10), retail sales (July 13), and most importantly, inflation (July 16).
[B]Equity Market - NZSX-50:[/B]
New Zealand?s stock market remained listless, unable to acquire direction since the US equity markets were closed on account of a national holiday. The benchmark NZSX-50 index closed down 3.56 points at 4236.71 on a turnover of NZD 97 million, as losses outnumbered gains by 57 to 36. Losses were suffered by several blue chip stocks with Fletcher Building, Contact Energy, Fisher & Paykel and F&P Appliances leading the declines.
[B]Fixed Income Market - 10-year Government Bonds:[/B]
The yield on New Zealand?s benchmark ten-year note increased 2 basis points to 6.68 percent. The fall in yields on government bonds follows resurgence in demand for European corporate debt after risk evaluations were lowered and concerns over the recent terrorist scare were alleviated.