BNZ Weekly Overview.

Welcome to the June 4 2009 issue of the BNZ Weekly Overview.

This week we are once again running our monthly survey. If time permits please click on the link below and tick whether you believe the economy will get better or worse over the coming year. Also if possible, pen a sentence letting us know how things are in your industry at the moment specifying what that industry is.

http://survey.usuite.com/survey/7f801dd05f3742619b046cc119c15106.sur

The week has produced quite a mixture of good and bad news. The good news was mainly offshore with positive economic data including the avoidance of a technical recession in Australia propelling sharemarkets higher. But this same sentiment has played havoc with NZ exporter prospects as the NZD at one stage rose above US 66 cents before settling near 63 cents.

As we have noted for a great number of weeks now, the shift in investor sentiment toward the green shoots scenario has seen money moving into shares, into risky currencies like the NZD (especially out of Japan), and caused medium to long term borrowing costs to increase.

There appears little reason for home owners to keep floating and most will cut their likely costs for the next few years by either fixing one year right now and saving almost 1% compared with floating (if staying short is their goal), or fixing three years at a 1.4% below average rate of 6.75%. The chances that fixed rates decline from current levels seem small.

Full BNZ Weekly Overview (pdf)

ENDS

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