This past week has been one of a small wave of relief washing around global financial markets following some positive movement at the European leaders’ summit toward a European-wide banking regulator. But apart from allowing the bailout fund to recapitalise banks directly rather than through governments, and announcing a small stimulus package, the meeting did nothing to change the risk of Greece leaving the Euro. Thus in coming weeks we could easily see worries about a Euro break-up return.
This means in turn that much as importers may welcome the movement upward in the NZD this week, that movement could easily reverse and might do so if tomorrow night’s employment report in the United States turns out to be as weak as the previous three months.
Basically conditions offshore remain very uncertain while domestically there is growth in the housing sector and commercial vehicle registrations, but general restraint elsewhere.