October 15 2009 issue of the BNZ Weekly Overview

Welcome to the October 15 2009 issue of the BNZ Weekly Overview.

This week we have learnt that retail sending rose a stronger than expected 1.2% in August, house prices rose a stronger than expected 1.9% in September, and consumer prices rose 1.3% during the September quarter rather than the 0.8% rise which had been expected. In other words, all the numbers added up to more upward pressure on interest rates and the exchange rate which this evening is firing toward US 75 cents. Even worse than expected fiscal numbers have failed to stem the Kiwi dollar’s rise – partly because happiness they say is relative and investors remain happy with our fiscal accounts because those of most foreign governments look tremendously worse.

As we have been noting since March – there remains little reason for expecting anything other than rising interest rates, a rising exchange rate (since May), and a recovering housing market.

BNZ Weekly Overview (pdf)

ENDS

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