Weighing the economic toll of Gabrielle
The economic cost of the destruction from Cyclone Gabrielle is, as yet, impossible to quantify. But ANZ Bank economists consider it important to start thinking about what it all means. The sheer number of people and the area impacted point to a significant effect on economic activity. First there’s the near-term disruption and destruction (eg agricultural production), but in the longer term, there’s the repair and rebuild that will happen over 2023 (and beyond). The cyclone has left a trail of...
Multiple regions impacted by storm
Stormclouds over Auckland (Photo: Stuff) 31.1.23 Businesses in many parts of Auckland city will face disruptions associated with damaged stock and premises. In some cases, there will also be lost trading days as repairs are carried out. A range of businesses have been affected including supermarkets and the regions’ airports. The hospitality sector is likely to see significant disruptions. There are also likely to be related disruptions to supply chains. At this stage, the cost of the rains...
News flow holds market risks
31.1.23 US stocks are selling off in what will be a massive week of corporate earnings, a key Fed decision, and an employment report that should keep wage pressures alive, says Edward Moya, Senior Market Analyst, The Americas OANDA this morning. The January rally has hit a wall and probably won’t have a chance of returning until we get beyond Wednesday’s Fed press conference and Apple’s results after the Thursday close. Spain Treasury yields are rising after Spanish inflation unexpectedly...
Picture of resilience says Westpac
17.01.23 The NZIER’s latest update on business conditions pointed to resilience in business activity through the September quarter, says Satish Ranchhod, senior economist at Westpac. A net 3% of businesses reported that trading conditions picked up over the last three months (up from zero last quarter). “While that’s not a large increase, the economy has already been running hot through 2022 to date. “Consistent with that picture of resilience, very few businesses are reporting that a lack of...
Inflation talk has spooked the horses
17.1.23 The Q4 Quarterly Survey of Business Opinion (QSBO), which was conducted after the hawkish November MPS, hit a record low in Q4, displaying similar themes to the December ANZ Business Outlook, says ANZ senior economist Miles Workman. The November Monetary Policy Statement appears to have spooked the horses, but it’s not yet clear how far they have bolted. Seasonally adjusted confidence hit a record low (in data going back to the 1970s). To gauge how sticky the shock value from the...
CPI will reveal leap in prices
17.10.22 // This week’s Consumers Price Index is set to reveal another big rise in prices. Westpac economists forecasting a 1.8% increase in the CPI over the three months to September. “While that would see the annual inflation rate slipping from 7.3% last quarter to 6.9%, we’re still looking at a picture of consumer prices that are continuing to charge higher,” says “The September quarter inflation result (due for release on Tuesday) will be boosted by the seasonal rise in vegetable prices,...
Aussie report season overview
Commonwealth Securities chief economist Craig James reviews the report season on the ASX. View HERE https://www.commsec.com.au/market-news/reporting-season/aug-22/reporting-seson-wrap-aug-2022.html
What did Jerome Powell say….?
Last night's speech by US federal Reserve Boiard chaifrman Jerome Powell at the annual retreat of central bankers at Jackson Hole, in Wyoming, warned of pain ahdead for the US economy - and was immediately the cause of billions of dollars of pain on Wall Street. The S&P 500 fell 3.4 percent, its worst daily showing since mid-June, after the Federal Reserve chair spoke about the path ahead for monetary policy, reported the New York Times. The Dow Jones plunged 1,008 points to...
US market had one direction to go
14.6.22 \\ US stocks only had one way to go after inflation fears intensified and raised the risk of stronger tightening by the Fed and a much sooner recession, says Edward Moya, senior market analyst, The Americas, for OANDA this morning. “Wall Street is facing a plethora of negative headlines, but the problem is that until we see a deterioration with credit conditions and market functioning, the Fed has the greenlight to tighten as much as possible to get inflation under control “An ugly...
COMMENT A flock of black swans swarming in the trade sector
19.3.22 Warren Head International events continue to background both trade and internal economic thermometers, and there is a degree of uncertainty about what now represents a ‘temporary’ problem that will wash through and what will stick around for a while longer. Shippers will be hardened by the experience of the last two years that any early hopes that the COVID-19 pandemic would be a limited emergency proved to be poorly based speculation. The costs continue to rack up and will rate...
COMMENT – Weighing up where Russia sanctions will fall.
12.3.22 Warren Head In response to the invasion of Ukraine. New Zealand Parliament has had before it this week the Government’s Russia Sanctions Bill, which will significantly expand already existent sanctions on Russia. For the first time the new law will target individuals and companies connected to the Russian Government through a first of its kind, targeted, autonomous sanctions regime. The fast-track Bill follows a series of sanctions on Russia by the US, EU and UK on Russia’s...
COMMENT Two very different events with economic implications
5.3.22 Warren Head The tragic descent of the Ukrainian crisis from the phoney phase of double-speak and menacing threats into an active war zone is yet another of those historic shocks for which the early 21st century is building up a bad reputation. It remains astonishing that in the 21st Century, that such an audacious act as the theft of a neighbouring nation would even be contemplated. Yet, as we have seen, under our own noses, that democracy can be hijacked by thugs. After...
A lot to cram in to the MPS
21.2.22 This week’s Monetary Policy Statement will be much anticipated, not least because of the unusual three-month gap between reviews, says Westpac. “But it’s not just due to the long wait; a lot of economic action has been crammed into the last few months as well,” comment Westpac economists. At the forefront of the discussion has been inflation – it reached a 30-year high of 5.9% at the end of last year, they say in a note “Similarly, inflation is coming back on to global radars. The US...
2021 ending on a ‘new normal’
20.1.221 Delta derailed 2021, here’s hoping for a better 2022 2021 was not the year anyone expected and was largely shaped by the COVID-19 pandemic, writes Jane Turner, senior economist at ASB Bank Vaccines – using technology that has been developed over the past few decades – were rolled out, but misinformation and distrust undermined vaccination efforts globally. The emergence of the more contagious Delta variant changed the COVID-19 landscape. Many countries which had successfully...
The Weather in Your Place
Today's weather from MetService in New Zealand (Click on link above. Open in new window and view video - scroll down on Metservice site)
MARKETWEEK: An optimistic bounce on equity markets
EBOS takes on billion dollar health bid 11.12.21 Warren Head A week may be a long time in politics as we have seen in New Zealand – but it is also in sharemarkets as evidenced by buyers pouring back into equities they cut loose in November. Some bargain buys proved winners. Fears of the Omicron variant of Covid being a fast-moving spreader helped to thrash out sellers just last month. Throw in all the chatter about the inevitability of higher interest rates and markets struggled to hold the...
Lowest volumes of milkpowder in years
5.8.21 The GDT Index dropped 1 per cent in this week’s dairy trade auction with average prices landing at USD 3,784/tonne, culminating in the 8th consecutive fall in the GDT Index since end of April 2021. WMP was the main product under the pump in this later GDT Event, with other commodities giving a steady performance. WMP price index dropped almost 4 per cent, with average prices landing just shy of USD 3,600/tonne: back in line with prices seen earlier in February this year, reports...
Labour market lifts debate on inflation
5.8.21 All the heat we’ve been hearing and warning about regarding New Zealand’s labour market, has been borne out in this week’s data – including a clear pick-up in wage inflation, comments BNZ senior economist Craig Ebert. “This surely removes any doubt about the RBNZ soon removing its foot from the accelerator, otherwise known as the Official Cash Rate (OCR). “Accordingly, we now expect the Reserve Bank to lift the OCR to 1.00% by November. This is formally expressed as 25 basis point...
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Regional confidence picks up
Regional economic confidence bounced back in the December quarter after three consecutive quarters of decline, according to the Westpac-McDermott Miller Regional Economic Confidence survey In total, eight of eleven regions reported a gain in confidence, one moved sideways, while two recorded falls. The gap in household confidence between regions with large rural backbones, which were previously more optimistic, and those that have large metropolitan centres, which were previously...
