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Not until some time next year.
44% (15 votes)
It won't, this tightening cycle is done and dusted.
32% (11 votes)
Before the end of 2014.
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90 seconds at 9 am: China house prices rise; US business lending grows; Ireland upgraded; Demographia reports; bond yields and swaps fall; NZ$1 = US$0.825 TWI = 78.4

Posted in News
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Here's my summary of the key news overnight in 90 seconds at 9 am, including news the real estate bubble keeps growing in China.

New-home prices in China’s cities defined by the government as first tier rose more than 15% in December, led by Guangzhou and Shenzhen in the south, as local property curbs failed to deter buyers.

The REINZ house price data for December will be out either today or tomorrow.

Reuters is reporting that bank lending to businesses have risen to a record high and bank managers say they are increasingly optimistic about the American economy.

Increasing demand for bank loans often is a prelude to higher economic growth. With the US government budget crisis seemingly sorted for now and Europe showing signs of economic recovery, companies are feeling more comfortable borrowing to invest in machinery, factories, and buildings.

The credit rating agency Moody's upgraded Ireland's debt from junk status over the weekend saying their economy has good potential for growth. Moody's was the only one of the big three credit rating agencies to push Ireland below investment grade. A stronger construction sector is aiding that growth.

The annual Demographia survey which tracks and benchmarks median multiples across a number of countries, is out today, its 10th review. This review uses house prices at 3 times household income as a measure of 'affordability'. For 2013, it says New Zealand was at 5.5 times and Auckland at 8 times. By its standards, only Ireland, Canada and the US had some markets that are 'affordable'. (It is not clear whether this new survey, based on September data, uses New Zealand's latest Census results.)

Benchmark UST 10yr bond yields fell to 2.82% - in fact, NZ swap rates start the week a lot lower, off between 2 and 5 bps across the curve with the curve flattening.

The NZ dollar starts today well of its Friday highs at 82.5 USc, 93.9 AUc and the TWI is at 78.4. It fell back across the board in final trading on Saturday in New York.

If you want to catch up with all the changes on Friday, we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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7 Comments

Property in China:Jenga

Property in China:Jenga anyone?

A 'stronger construction

A 'stronger construction sector' in Ireland aiding recovery? Can't be houses, there were whole ghost 'towns'  (or 'estates' as they are known in Ireland) lying empty in rural Ireland and the commuter belt around Dublin. I don't think they've been filled up yet.
I wonder what's being constructed...roads?

The $24 trillion Chinese

The $24 trillion Chinese juggernaut will be funding it. Don't need to worry about anything actually being tenanted or having a cashflow. The Chinese certainly don't.

I don't think there is

I don't think there is anything in Ireland of interest to the Chinese. I imagine Ireland is a tiny, insiginifacant blip on the Chinese radar.
It has no natural resources China wants and is currently plundering the African continent for.....

And look how much some

And look how much some Chinese investors paid for JP Morgan's New York headquarters.
 
http://www.bloomberg.com/news/2013-10-18/jpmorgan-tower-sale-sets-record...

Both links refer to Chinese

Both links refer to Chinese investments in the US. They do no mention Ireland. Still at a loss to see what's driving this 'strong construction sector' in Ireland.
Irish Times states the only Far East investment in Ireland will be its buying up of Irish Bonds.
http://www.irishtimes.com/business/economy/irish-government-regains-investment-grade-rating-from-moody-s-1.1659698