Tony Alexander

Economic Commentaries

The full pdf version of the Weekly Overview is contained here.

Weekly Overview 25 February 2016

Thursday February 25th 2016

This week’s Overview is on the short side and I don’t think there is anything in it to set the world alight so if you are pressed for time go back to whatever you were watching on Netflix.

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Weekly Overview February 18 2016

Thursday February 18th 2016

Last week I wrote about the weakness in world sharemarkets in terms of specific factors. These included losses for energy sector businesses because of the structural decline in oil prices, slowing growth in China and worries about debt and capital outflows, weakness in the Japanese economy, and worries about the impact of tightening US monetary policy. But there are wider issues in play which also lie behind the growing disquiet.

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Weekly Overview February 11 2016

Thursday February 11th 2016

Sharemarkets have fallen again this past week as investors find themselves with plenty of reasons for backing away from riskier assets. For some it is the fall in oil prices and resulting poor profit outlooks for businesses involved in the energy sector, expectations that sovereign funds of oil exporting countries will sell assets to offset revenue losses, and losses to be taken by banks which have lent to energy companies.

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Weekly Overview February 4 2016

Thursday February 4th 2016

Two weeks ago I listed reasons why despite the dairying downturn growth in the NZ economy would remain good especially compared with other countries and this would limit scope for lower interest rates, support jobs growth, and keep the NZD from falling much.

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Weekly Overview January 28 2016

Thursday January 28th 2016

The Reserve Bank left the cash rate at 2.5% this morning which surprised no-one. But they did open the door a bit more to cutting further, so although our view remains that they won’t move again, one cannot rule out a 0.25% reduction in March. A lot depends on what happens overseas as domestically our economy has a lot of strength.

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Weekly Overview January 21 2016

Thursday January 21st 2016

Welcome to the first Weekly Overview for 2016. The year has started fairly dismally for sharemarket investors and businesses exposed to minerals commodity prices. There has been record early-year weakness in some share indexes, and oil prices are almost in freefall as supply booms, dragging down other energy-related prices by association.

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Weekly Overview December 17 2015

Thursday December 17th 2015

This is the last Weekly Overview for 2015. The next one will appear on January 21. I hope everyone has a merry Christmas and a good summer break.

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Weekly Overview December 10 2015

Thursday December 10th 2015

This is the second to last Weekly Overview for the year. In it I take a look at the decision by the Reserve Bank to cut the cash rate another 0.25% but essentially rule out any further cuts. This makes sense as although inflation is low at 0.4% and not set to rise much, the ability of lower interest rates to boost inflation is limited these days and lower rates simply imply even faster growth in home lending and house prices.

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Weekly Overview December 3 2015

Thursday December 3rd 2015

In this week’s Overview I take a look at the implications for someone approaching or even in retirement of sustained low returns on conservative assets like term deposits, rising life expectancy, the coming slowing in labour force growth once the current migration boom eventually eases off, and the social connectivity which continued employment can bring.

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Weekly Overview November 26 2015

Thursday November 26th 2015

A couple of very large numbers made their appearance this week. One came from the International Visitor Survey which showed a massive 38% rise in spending by visitors to New Zealand over the past year. The tourism sector is in very good health and this is one of the important offsets to weakness in the dairying sector which will keep overall economic growth up and discourage the Reserve Bank from contemplating rate cuts beyond probably one more 0.25% reduction.

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