This week we have received generally better than expected data for New Zealand suggesting that retail spending has actually been quite strong since the middle of last year. That gels not at all with the experience of just about every retailer encountered over that period of time suggesting that the spending strength may simply reflect large discounting by retailers causing consumers to bring forward in time some spending they were planning later this year.
But in housing the numbers are unequivocally firm with good growth in sales and prices and properties selling at a hastening pace.
Offshore, the bailout of Spain’s banks was initially greeted positively. But realisation that the move means higher Spanish government debt plus increasing discontent by the Greeks and others who have had to make radical fiscal and economic policy changes for their bailouts, has seen markets sell off anew ahead of this Sunday’s Greek elections.
It is not clear what type of government will be formed in Greece if one can at all be formed, and it is unknown therefore whether previously agreed terms for receiving bailout funding will be reneged upon. The uncertainty has potential to cause radical shifts in financial asset pricing over coming weeks and contribute to what many including the World Bank feel will be many more years of global financial instability.Download document