BNZ Weekly Overview, Jan 20 2010

Welcome to the January 20 issue of the BNZ Weekly Overview.

This week we have learnt the following.

The NZ housing market is off its mid-2010 lows with mildly rising sales and a slight acceleration in selling time but flat prices.
Global commodity prices continue to rise bringing higher NZ export incomes but rising costs for consumers and businesses.
Following on from last week’s gain in tractor registrations we have seen another hint of improving rural spending with farm sales recovering mildly though the level of activity remains very low.
Inflation has jumped to 4% but its mainly GST and leaves little threat of monetary policy tightening soon.

In Europe the glass half full phase continues with successful debt auctions but no concrete plans yet for better managing the still fraught debt situation.
In China monetary policy has been tightened again via higher bank reserve requirements but fears of a rapid slowing in growth remain muted – hence the still rising commodity prices.
US retail spending is rising but only slowly, somewhat belying the quite optimistic comments about Christmas spending by major retailers.
The Chinese President is visiting the US and no hint of faster Yuan appreciation has been given.

The NZD is back where it was last week against the USD near 66.3 cents but the USD has fallen to near a two month low against the euro.

WOJan20.pdf

ENDS

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