Tony Alexander

Economic Commentaries

Rates up a tad

Thursday May 23rd 2013

This week we learnt that consumer confidence measured in the regular survey undertaken by Roy Morgan improved to a reading of 123.7 from 119.2 in April. This is the highest reading since 2010 and what we take from it is that the chances of higher than expected retail spending and household debt growth are rising.

The result does not necessarily mean that these potentially inflationary things happen – look at what happened after the 2009 confidence surge – but the data will pique the interest of the Reserve Bank, as will the recent weakening of the NZD against the USD which they will be watching closely.

This week wholesale fixed rates have crept higher on the back of US rates rising in response to speculation of the Federal Reserve ending its huge money printing operation soon – or at least tapering it off before the end of the year.

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