Tony Alexander

Economic Commentaries

Weekly Overview, Nov. 21

Thursday November 21st 2013

Many key indicators of the NZ economy are turning firmly upward. But we have seen all of them do this before since 2009 yet upturns have faltered. We examine why this time things are different and growth is likely to be sustained for three or so years. Page 1-3

Fix or Float

We run through a list of central bank monetary policies which are virtually outright guesses looking ahead. With so much uncertainty one cannot develop an interest rate cost minimising strategy and must instead focus on risk management first and foremost. Page 3

NZD Little Changed

Over the week the NZD has not moved much at all. Looking ahead our strong growth outlook implies a rising currency. But if US money printing slows we may not gain much against the greenback and could fall. Page 4

Other Economies

Worries about China have eased following the release of a list of 60 reform items. The UK economy is looking better, worries about Europe are deepening anew, Japanese growth has slowed and consumer confidence has fallen, and in the US housing and retailing indicators could easily look a lot better than they do. Pages 5 – 8

First Home Buyers Flee

We look at how one cannot reasonably claim that rising prices are the cause of the sudden withdrawal of first home buyers from the housing market. Pages 9 – 12