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15 January 2018
bnz.co.nz/research
Page 1
Markets Outlook RESEARCH
2018: The More Things Change…
Govt/RBNZ changes no sweat for broad eco view
Tuesday’s QSBO to exhibit post-election grump
CPI track stifled by Stats NZ re-weighting
But housing inflation looks to be re-heating
Recent rain warmly welcomed…by farmers
NZD up on solidifying global optimism
We still pitch OCR increases starting H2 2018
In spite of all that has changed, and is changing, we
haven’t really altered our forecasts of the NZ economy,
from a broad perspective. As such, they remain relatively
upbeat. The new government’s policies will probably
affect the composition of growth more than its overall
rate, while “supporting” inflation from the bottom up.
We also see the personnel and mandate changes
afoot at the Reserve Bank as scant cause to amend
our broad macro view. So we still envisage pressure
will come on the RBNZ to start lifting its policy rate
later on this year.
From a GDP perspective, we forecast real growth of 2.9%
for calendar 2018 and the same for 2019. This is after
estimated growth of 2.9% for 2017 – and expansions in
2015 and 2016 of 3.5% and 4.0% respectively – each
1.0% stronger after Statistics NZ’s recent annual revisions.
2.9% growth in prospect should be enough to hold the
unemployment rate below 5%, as net inward migration
is slow to abate.
However, there will probably be some near-term chop to
get through. Specifically, we think the NZ economy, ran a
bit slow late last year and will continue to do so in the
March quarter of this year. This relates to the recent
election cycle and result, especially with respect to the
business sector.
Steady As She Goes
Expect A Sag
A cautionary tone is certainly what we anticipate for
tomorrow’s NZIER Quarterly Survey of Business Survey
(QSBO). Indeed, we expect it to sag quite a bit, in line with
what the monthly ANZ business survey has done since
September. The only question is, by how much? But
unless the QSBO is predominantly negative, we’ll largely
look through it as having elements of over-reaction to the
new centre-left government.
In the least, the QSBO might hold up better than the ANZ
survey given 1) it doesn’t directly survey farmers (and
agriculture provided the biggest drag in December’s ANZ
business survey) and 2) the QSBO has a relatively nearer-
term focus than the ANZ survey does. And a look at
November’s PMI and PSI readings suggest economic
activity was holding together just fine, just after the
election. We’ll get an update on the PMI this Friday.
As for the QSBO’s inflation gauges, however, these
appear prone to remain firm, even strengthen a bit
(if the ANZ survey is any guide).
Even so, it’s not clear that the headline CPI track itself
will sustain pressure on the RBNZ to hike its cash rate.
To be sure, we expect annual CPI inflation of 1.9% for
Q4 (lower than the 2.0% we previously anticipated, as a
consequence of the new CPI weights that Statistics NZ
announced last Friday – meaning a higher weight on
falling food prices and a lower weight on rebounding
fuel prices). In its November Monetary Policy Statement
(MPS) the RBNZ forecast annual CPI inflation of 1.8%
for Q4 2017.
As it turned out, this morning’s December Food Price
Index had no impact on our CPI track. It fell 0.8%, exactly
as we expected.
-2
-1
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1
2
3
4
5
6
7
8
Jun-88 Jun-91 Jun-94 Jun-97 Jun-00 Jun-03 Jun-06 Jun-09 Jun-12 Jun-15 Jun-18
Ann avg% growth
NZ Real GDP
Before annual revisions byStats NZ
After annual revisions byStats NZ
Source: Statistics NZ, BNZ Quarterly
BNZ forecasts
-50
-40
-30
-20
-10
0
10
20
30
40
50
60
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
net % whoare positive
Monthly
Business Activity
Source: ANZ, NZIER, BNZ
QSBO, 3 month outlook
ANZ business survey, 12 month outlook
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 2
Getting There
But also be aware that our CPI inflation forecasts
undershoot those of the Bank’s, starting Q2 this year
and into early 2019. In particular, we expect 1.5% for the
year to June 2018, whereas the November MPS forecast
2.1%. Of course, the medium-term view on CPI inflation,
and trends in core inflation, should over-ride this, in
recommending a start to normalising the Official Cash
Rate from its record low. Threats of serious disinflation
have surely passed. Nonetheless, if we’re closer to the
truth on headline CPI inflation for the next while, then the
Reserve Bank might find further excuse to delay any
tightening it envisages.
This is especially if GDP growth proves a bit under
par over the immediate term, as we also think is the
likelihood. November’s MPS expected GDP growth of
0.9% for Q4 2017 and 1.2% for Q1 2018. We are looking
for 0.5% for each.
Commodity price updates for this week come in the
form of Wednesday morning’s Global Dairy Trade auction
and the afternoon’s ANZ commodity export prices for
December. While December’s indices appear mixed, we
are leaning to a further increase for the auction (after the
2.2% bounce in prices at the 3 January event). Whole-milk
powder futures are up, as are oil prices, while the US
dollar is down. Also, Fonterra recently announced a
reduction in its tonnage on offer.
Having said this, the country has had decent rains over
recent weeks – well most of it anyway. This has alleviated
the threat from the very dry conditions that prevailed
into the end of 2017. Certainly, a lot of farmers will be
breathing easier (although it seems the hydro lakes
down south could still do with more rain).
As well as the weather, we’ll be looking out for
December’s housing statistics from the Real Estate
Institute. We expect these to be published by the end of
the week. Chances are that they will show a resilient
market, with signs that inflation is far from dead and
buried, along with turnover that’s recovering post the
election. We caught whiff of this from the Auckland-
centric Barfoot and Thompson results for December,
Respite With The New Year Rains
the Quotable Value NZ report for the month and various
other housing data and anecdote.
In keeping with this, November’s building consents
obviously rebounded with some gusto (in figures
published last week), as apartments righted themselves
from a sag in October. Indeed, apartments, along with
townhouses, units and retirement village units, are driving
residential consents now, while those for standalone
houses are tending to level off (after a strong run).
For more indication on late-2017 activity, we expect
tomorrow’s electronic card transactions to increase 0.2%
for December. This would, following their 1.2% spike the
month before, suggest a solid increase in Q4 retail sales,
after their go-slow in Q3.
It’s also worth noting that global growth indicators
continue to go from strength to strength, and in a much
more synchronised fashion. This carries on from a
recovered pace in 2017, after a very patchy and slow
2016. But while this has helped put some starch in global
inflation, it has not pressed it to any strong pace as of yet.
The ongoing improvement in global sentiment this year,
including in world equity markets, has coincided with a bit
of a run-up in the currency so far, albeit most pronounced
against a weakening US dollar. Since we adjourned
just before Christmas the NZ TWI has crept up to 75.0,
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Annual % change Consumers Price Index
RBNZNovember
MPS
BNZ
Source: RBNZ, Statistics NZ, BNZ
Target low
Quarterly
Target peak
Forecasts
Target mid-point
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 3
from around 74.0. We expect it to peter off as the year
progresses. However, for the moment, the exchange rate
reinforces the cap we see on local CPI inflation, relative to
RBNZ expectations. The November MPS expected the
TWI to flat-line at 73.5.
As for NZ interest rate markets, they still have a stronger,
and sooner, view on OCR hikes than the November
MPS signalled. The market fully prices a 25bp hike by
November and another two by the end of 2019, marking
the policy rate at 2.50% by then. We see the OCR at a
more-normal 3.00% by the end of next year. This is with a
first hike in August, although we appreciate the risk of
delay to this starting point.
Upside, Over Time
craig_ebert@bnz.co.nz
0
1
2
3
4
5
6
7
8
9
10
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
%
Quarterly
Cash Rate
Source: RBNZ, BNZ
Forecasts
BNZ
Nov 2017 RBNZ MPS
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 4
Global Watch
Australian labour data expected robust
US has Fed speaker and bank reporting season
China GDP growth expected at solid 6.7%
Australia
Aussie data flow picks up this week with Employment
data on Thursday. There is also plenty of second-tier data,
with the pick being Monthly Consumer Confidence on
Wednesday. Other second-tier pieces include the MI
Inflation Gauge on Monday, Housing Finance on
Wednesday and Inflation Expectations on Thursday.
For Employment, Australia’s longest run of job creation
since 1994 is set to continue with the market expecting
+15k jobs m/m in December. NAB sees upside risks to
this given solid job advertising trends on SEEK and by
our own NAB Business Survey in November and are
forecasting a bumper +35k employment print. For the
unemployment rate, NAB and the market expect this to
|be unchanged at 5.4%.
Sample rotation also seems to favor a strong print this
month with the outgoing 1/8 of the sample having a lower
tendency to be employed compared to the sample as a
whole (employment to population ratio 61.8% compared
to total sample 62.1%). If the incoming 1/8 is more in line
with the existing sample then rotation alone could
potentially add 10-15k jobs in the month.
A Very Strong Labour Market In 2017
While NAB expects an unchanged unemployment rate
for this month, the trend is firmly lower in 2018. Trend
employment growth currently exceeds the level needed to
keep the unemployment rate unchanged and at +22k is
enough for it drop 0.1 every 2-3 months. The most recent
employment indicators suggest it could fall below the
RBA’s 5% NAIRU in 2018 – Job Vacancies this week
were very strong. Our view of a continuing strong labour
market is part of the reason why NAB sees the
RBA hiking rates twice in the second half of 2018.
As for the second-tier data, Monthly Consumer
Confidence on Wednesday could be interesting to see
whether the more buoyant mood from consumers
continued into 2018. The strong labour market has no
doubt helped to lift confidence and unemployment
expectations amongst consumers are now at their lowest
since May 2012. It is also worth noting here the previous
divergence between Consumer and Business confidence
has now almost closed.
Labour Market To Get Even Stronger In 2018
Consumers Becoming More Bouyant
MI suggests inflation was building in Dec
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 5
Other second-tier data pieces include the MI Monthly
Inflation Guage on Monday, Housing Finance on
Wednesday (0.0% m/m expected) and Inflation
Expectations on Thursday. The Inflation Gauge may be
worth paying attention to ahead of the official ABS Q4
CPI on Wednesday 31 January – the Gauge suggests
inflation pressures were building in Q4.
Market focus
A new section in the What to Watch that looks at one
interesting market development that is set to intrigue
analysts in the week ahead.
As analysts we’ll be watching whether there is a decisive
break in US Treasury yields that signals the end of the
bond bull market and the beginning of a bear market.
The 10-year Treasury is sitting at 2.57% - bang on line
with its ten year average.
A Bear Market For Bonds? – Not Yet Clear
China
Q4 GDP on Thursday would normally be the main item,
though there may be less of a reaction to it following
Premier Li’s comments that GDP growth was about 6.9%
in 2017 – note consensus which predates the comments
sits at 6.8% for the YTD. Given that, more interest is likely
to be on the monthly trio of Retail Sales, Fixed Assets and
Industrial Production – all expected to be similar to last
month’s growth rates.
US
A quiet week start to the week with Monday being a
Federal Holiday (Martin Luther King; bond/equity markets
are closed). While quiet, markets will be digesting the
latest moves in yields following the stronger than
expected core CPI print. Datawise the main pieces are
Industrial Production on Wednesday (0.3% expected)
and the Uni Mich. Consumer Sentiment Report on Friday
(97.0 expected). There are also a number of regional
manufacturing indices, including the NY Empire on
Tuesday and the Philly Fed on Wednesday.
The Fed also releases its Beige Book on Wednesday,
while Fed speak continues with non-voters Harker,
Rosengren, Evans and voter Mester on the circuit.
Bank profit reporting season continues with Citigroup
(Tuesday), Goldman’s, BoAML (Wednesday) and Morgan
Stanley (Thursday). Finally, Friday 19 looms as the
deadline for a possible government shutdown – likely to
be averted with a temporary funding agreement.
Canada
A likely rate hike by the Bank of Canada on Wednesday a
main focal point for markets. Around 78% of economists
expect a hike and markets are 85% priced having moving
sharply on last week’s employment data where the
unemployment rate fell to 5.7% - the lowest since 1974
and well below most estimates of the NAIRU. Given the
rapid improvement in the economy in 2017, three hikes
in total are priced for 2018.
Eurozone
A quiet week ahead with only the final version of the CPI
on Wednesday. Europe also has Trade Balance data on
Monday. Key ECB speakers include Weidmann on
Saturday, Nowotny on Wednesday and Coeure on Friday.
For markets, the Euro will be the focus as it makes three
year highs.
UK
An important week with CPI on Tuesday and Retail Sales
on Friday. For CPI the market is looking for the y/y rate to
have finally peaked and is forecasting Headline at 3.0% y/y
and Core at 2.6% y/y.
Japan
An industrial focus with Machine Tool Orders Monday,
Core Machine Orders on Wednesday and Industrial
Production on Thursday
tapas.strickland@nab.com.au
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 6
Fixed Interest Market
Reuters: BNZL, BNZM Bloomberg:BNZ
So far this year, New Zealand has largely been tracking
what’s been going on in offshore fixed interest markets.
US Treasury yields breached the psychologically important
2.50% level last week, their highest level since March and
within proximity of 3 year highs. NZ longer-term rates have
risen in sympathy with those offshore while the 2 year
swap rate has been reasonably sticky around 2.20%.
The rise in US yields to start the year has been driven by
a combination of factors. Stronger global growth has
seen expectations grow that central banks will dial back
emergency monetary policy settings. The ECB minutes
highlighted the central bank might change its guidance
around QE in the coming months – probably to end QE in
September – while the BoJ’s reduction in its longer-term
purchases of JGBs caused some to speculate the BoJ
may likewise reduce stimulus this year (we are doubtful
of the latter). Meanwhile, higher commodity prices and a
better than expected US core CPI release on Friday have
seen market expectations of inflation pick up somewhat.
The market-implied probability of a March hike now sits
above 80% with close to 2½ rate rises priced for 2018.
New Zealand longer-term rates have risen in sympathy
with those offshore. The 10 year NZ swap rate is up 7bps
so far this year while the 10 year NZGB is up around
12bps. The spread between NZ and US government bond
yields has stabilised near the tightest levels seen since
the mid-1990s. As we discussed last week, we expect
longer-term NZGB yields to rise this year alongside those
of US Treasuries, in part to retain demand from foreign
investors. We would see any declines in NZ rates towards
their year-to-date lows as an opportunity to lighten up on
duration and for corporates to put hedges in place.
The DMO resumes NZGB tenders this Thursday after a
month-long pause, with $200m 2025 maturity bonds to be
issued. The seasonal pause in issuance from the DMO
alongside the maturity of the Dec17 NZGB in mid-
December contributed to a sharp decline in NZGB yields
and widening of swap spreads into year-end. These
moves have partially retraced this year (the 2023 NZGB
is up 15bps in yield), although with a number of NZGBs
trading special in repo – implying the market is short – the
2025 tender should go reasonably well.
While NZGB supply has been on hold so far this year,
there have been a number of Kauri bond issues from
supranationals to fill the supply void. Asian Development
Bank, IADB and NIB have together issued over $1bn so
far this year, all in the 5 year maturity.
The short-end of the NZ swap curve has remained
subdued, despite the relatively large moves seen offshore
and in NZGBs. The 2 year swap rate has traded a 7bp
range in 2018 and is currently at 2.21%, close to where it
ended last year. While the market has firmed up its pricing
of rate rises by the Fed, it remains sceptical the RBNZ will
be tightening in the first half of this year.
Looking to the week ahead, the local data calendar is
reasonably sparse, with the highlight being the QSBO
released tomorrow. The next major economic data release
in NZ is CPI, which comes out on 25th January; we expect
a 0.4% increase for the quarter which would take the
annual rate to 1.9%. We expect the 2 year swap rate to
remain range-bound between 2.15% - 2.25% until then.
Offshore, there isn’t much major economic data either
although it’s possible the market could still challenge the
2017 highs in the 10-year US Treasury yield of 2.63%.
The major event offshore is the Bank of Canada’s rate
decision, where it is expected to raise rates for a third
time this cycle. With the rate rise almost fully-priced, the
market’s focus will be on the accompanying statement
and any comments from the Governor about the potential
for further rate rises this year. There’s no automatic read-
across from BoC hikes to the RBNZ, but it does reinforce
the backdrop of an improving global economy and more
central banks shifting towards tightening monetary policy.
NZ-US bond spreads at tightest level since 1990s
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1990 1994 1998 2002 2006 2010 2014 2018
NZ-US 10 year NZ-US 5 year OCR-Fed funds rate spread
Source: Bloomberg
% %
Current Rates/Spreads and Recent Ranges
Current Last 3 -weeks range*
NZ 90d bank bills (%) 1.88 1.87 - 1.89
NZ 2yr swap (%) 2.23 2.17 - 2.25
NZ 5yr swap (%) 2.73 2.65 - 2.73
NZ 10yr swap (%) 3.24 3.11 - 3.24
2s10s swap curve (bps) 101 92 - 101
NZ 10yr swap-govt (bps) 37 33 - 43
NZ 10yr govt (%) 2.87 2.72 - 2.89
US 10yr govt (%) 2.55 2.40 - 2.60
NZ-US 10yr (bps) 32 27 - 33
NZ-AU 2yr swap (bps) 19 17 - 21
NZ-AU 10yr govt (bps) 9 3 - 15
*Indicative range over last 3 weeks
nick.smyth@bnz.co.nz
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 7
Foreign Exchange Markets
Reuters pg BNZWFWDS Bloomberg pg BNZ9
The NZD ended last year on a strong note and has begun
2018 in a similar fashion. Over the past month, the NZD
has been one of the best performing major currencies
(+4%), beaten only by the Scandinavian currencies.
The backdrop for this move has been a step-up in risk
appetite, with our index reaching its highest level since
mid-2014. Investors appear optimistic about the economic
outlook ahead, with indicators pointing to the best global
growth conditions in more than six years, supporting
commodity currencies like the NZD.
The NZD’s recent strong recovery represents a bit of a
catch-up from last year’s overall underperformance.
Last year the NZD traded mostly below our short term
fair value model estimate. The strong rally over the past
month sees the NZD up through fair value, albeit only just,
less than 1% above the current model estimate of 0.7190.
Net speculative positioning data shows that a short
squeeze might have contributed to some NZD strength.
Positioning late last year and early this year was notably
short, providing a low hurdle for an NZD recovery.
Data through to the week ending 9 January shows some
closing of short positions, but overall positioning remains
unusually short. Technical indicators put the first area of
resistance at 0.7370 while the relative strength indicator
already suggests that the NZD is well into over-bought
territory. Our view is that the NZD recovery is likely to
soon run out of steam.
Our fundamental view on the NZD hasn’t changed.
From the current level the balance of risk is skewed to
the downside for the NZD, notwithstanding the possibility
of a further near-term short squeeze. The year ahead is
expected to show global growth flattening out, a less
favourable terms of trade environment for the NZD and
global policy rates heading higher. These fundamental
forces represent headwinds for the NZD in the year ahead.
In the week ahead the local economic dataflow begins for
the year. On paper, tomorrow’s quarterly survey of
business opinion is the key release, but the expected
plunge in many indicators should be ignored, simply
reflecting the survey picking up the formation of the new
government since the previous quarterly survey – some
negative headlines for sure, but not particularly
meaningful.
Reduced dairy volumes (owing to drought conditions in
some areas) offered at the GDT dairy auction should help
support dairy prices. The first auction early in the New
Year when most were still on holiday showed a modest
recovery in pricing after the slump towards the end of
last year.
On the global scene we’ll be interested in whether the
Bank of Canada hikes rates for the third time this cycle
(Thursday morning NZT). The market is pricing an 85%
chance of a 25bp hike but just as important will be the
commentary which will help guide expectations for further
possible moves. A dovish hike, for example, wouldn’t
necessarily support the CAD. Ultimately we see the global
policy rate environment as negative for the NZD to the
extent that rising global rates dent the outlook for global
growth and risk appetite.
The US economic scene is fairly quiet, while elsewhere
China’s data dump of real activity indicators and Australian
employment data both due Thursday offer some scope for
action in commodity currencies.
Last Friday we saw renewed strength in EUR and GBP
resulting in these NZD crosses falling 1.5% on the day.
For the year ahead EUR and GBP are our preferred
currencies, and this sees these NZD crosses fall through
the year, with mid-year targets of EUR 0.56 and GBP 0.48.
Risk Appetite Up to a Multi-Year High
jason.k.wong@bnz.co.nz
10%
20%
30%
40%
50%
60%
70%
80%
90%
2011 2012 2013 2014 2015 2016 2017 2018
BNZ Risk Appetite Index
Source: BNZ, Bloomberg
Cross Rates and Model Estimates
Current Last 3 -weeks range*
NZD/USD 0.7252 0.7000 - 0.7280
NZD/AUD 0.9172 0.9050 - 0.9220
NZD/GBP 0.5279 0.5180 - 0.5370
NZD/EUR 0.5945 0.5870 - 0.6050
NZD/JPY 80.57 78.50 - 81.30
*Indicative range over last 3 weeks, rounded figures
BNZ Short-term Fair Value Models
Model Est. Actual /FV
NZD/USD 0.7190 1%
NZD/AUD 0.9030 2%
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 8
Technicals
NZD/USD
Outlook: Trading range
ST Resistance: 0.7370 (ahead of 0.7430)
ST Support: 0.7115 (ahead of 0.7055)
The strong NZD recovery since mid-December has seen
previous resistance levels broken one by one. We see the
next area of resistance around 0.7370. There is weak
support around the 200-day moving average of 0.7115.
NZD/AUD
Outlook: Trading range
ST Resistance: 0.9230 (ahead of 0.9400)
ST Support: 0.9035 (ahead of 0.8975)
Resistance is at 0.9230 which matches both the 200-day
moving average and resistance levels in place since
September. The first area of weak support kicks in
around 0.9035.
jason.k.wong@bnz.co.nz
NZ 5-year Swap Rate
Outlook: Neutral
ST Resistance: 2.73
ST Support: 2.45
Market breaking higher. Break confirmed should we close
above 2.73.
NZ 2-year - 5-year Swap Spread (yield curve)
Outlook: Neutral
ST Resistance: +53
ST Support: +46
Ranges becoming quite tight. Trade a break of trendlines.
pete_mason@bnz.co.nz
NZD/USD – Daily
Source: Bloomberg
NZD/AUD – Daily
Source: Bloomberg
NZ 5-yr Swap – Daily
Source: Bloomberg
NZ 2yr 5yrSwap Spread – Daily
Source: Bloomberg
Markets Outlook 15 January 2018
bnz.co.nz/research
Page 9
Key Upcoming Events
Forecast Median Last Forecast Median Last
Monday 15 January
NZ, Food Price Index, December -0.4%
NZ, (pending) REINZ Housing Data, December
Aus, Inflation Gauge (Melbourne Institute), Dec y/y +2.7%
Euro, Trade Balance, November s.a. +€22.3b +€19.0b
US, Leading Indicator, December +0.4%
US, Holiday (obs), Martin L King Jnr
Tuesday 16 January
NZ, QSBO, Q3 +18
NZ, Electronic Card Transactions, Dec +0.2% +0.5% +1.4%
Jpn, Tertiary Industry Index, November +0.3% +0.3%
Germ, CPI, Dec y/y 2nd est +1.7% +1.7%P
UK, CPI, December y/y +3.0% +3.1%
US, Empire Manufacturing, January +19.0 +18.0
Wednesday 17 January
NZ, ANZ Commodity Prices (world), December -0.9%
NZ, Dairy Auction, GDT Price Index +2.2%
Aus, Housing Finance, November -1.0% flat -0.6%
Aus, Consumer Sentiment - Wpac, January 103.3
Jpn, Machinery Orders, November -1.2% +5.0%
Euro, CPI, Dec y/y 1st est +1.4% +1.4%P
US, NAHB Housing Index, January 72 74
Wednesday 17 January…continued
US, Industrial Production, December +0.4% +0.2%
US, Fed's Evans/Kaplan/Mester Speak, Monetary Policy
US, Beige Book
Thursday 18 January
Aus, Unemployment Rate, December 5.4% 5.4% 5.4%
Aus, Employment, December +35k +15k +62k
China, GDP, Q3 y/y +6.7% +6.8%
China, Property Prices, December
Euro, ECB's Weidmann/Coeure Speak
US, Housing Starts, December 1,290k 1,297k
US, Philly Fed Index, January +24.0 +27.9
Can, BOC Policy Announcement 1.25% 1.00%
Friday 19 January
NZ, BNZ PMI (Manufacturing), December 57.7
China, Industrial Production, Dec y/y +6.1% +6.1%
China, Retail Sales, Dec y/y +10.2% +10.2%
Germ, PPI, Dec y/y +2.3% +2.5%
UK, Retail Sales vol., December -0.9% +1.1%
US, Mich Cons Confidence, January 1st est 97.0 95.9
Monday 22 January
NZ, Holiday - partial, Wellington Anniv.
Historical Data
Today Week Ago Month Ago Year Ago Today Week Ago Month Ago Year Ago
CASH & BANK BILLS
Call 1.75 1.75 1.75 1.75
1mth 1.78 1.79 1.77 1.84
2mth 1.83 1.83 1.82 1.92
3mth 1.87 1.87 1.86 1.99
6mth 1.90 1.91 1.91 2.05
GOVERNMENT STOCK
03/19 1.78 1.78 1.78 2.19
04/20 1.95 1.95 1.93 2.39
05/21 2.13 2.12 2.08 2.55
04/23 2.39 2.38 2.31 2.80
04/25 2.66 2.63 2.57 3.06
04/27 2.85 2.81 2.71 3.14
04/33 3.17 3.12 3.04 3.48
04/37 3.32 3.26 3.24 3.80
GLOBAL CREDIT INDICES (ITRXX)
Australia 5Y 53 53 62 98
Nth America 5Y 47 45 50 66
Europe 5Y 44 44 47 69
SWAP RATES
2 years 2.22 2.18 2.19 2.40
3 years 2.41 2.36 2.36 2.62
4 years 2.57 2.51 2.50 2.80
5 years 2.72 2.66 2.64 2.94
10 years 3.21 3.13 3.10 3.40
FOREIGN EXCHANGE
NZD/USD 0.7252 0.7176 0.6995 0.7103
NZD/AUD 0.9168 0.9151 0.9126 0.9500
NZD/JPY 80.55 81.16 78.72 81.12
NZD/EUR 0.5944 0.5995 0.5937 0.6700
NZD/GBP 0.5278 0.5288 0.5227 0.5897
NZD/CAD 0.9039 0.8913 0.8997 0.9359
TWI 75.1 74.8 74.1 78.3
Markets Outlook 15 January 2018
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