Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that Cyclone Yasi has destroyed many homes and buildings on small towns on the North Queensland coast, but has spared the major cities of Townsville and Cairns.
However, 75% of Australia's banana crop has been wiped out, raising the prospect of banana prices heading for A$15/kg NZ$15/kg. Australia's sugar industry has also seen A$500 million worth of damage, which helped push sugar prices up to 30 year highs on world markets. See more here at The Australian.
Meanwhile, the UN's Food and Agriculture Organisation (FAO) has announced that global food prices hit a record high in January.
Back in New Zealand, the unemployment rate rose unexpectedly in the December quarter to 6.8% from 6.4%. See more here from Alex Tarrant.
Deutsche Bank has forecast this may mean GDP fell in the December quarter by 0.4%, which would mean New Zealand officially fell into a double dip recession in the second half of 2010. See more here at NZHerald.
Deutsche believes the Reserve Bank will not move the Official Cash Rate before September and has even raised the possibility that the next move might be a cut.
Meanwhile, BNZ economists have moved their prediction for the next interest rate hike out to the September quarter from the June quarter and expect the OCR to be lifted to 5% from 3% by September of 2012. See more from BNZ here.
Also, Finance Minister Bill English has told Bloomberg that the government will do all it can to take the pressure off the Reserve Bank to minimise the size of future rate hikes.
The New Zealand dollar fell almost a cent over the last day to NZ$77.2 after the jobs market surprise. See more in our interactive chart below.
European Central Bank chief Jean Claude Trichet said overnight that inflation risks were balanced in Europe, disappointing those hoping for interest rate increases there soon and dragging the Euro down by the most in 10 weeks. See more here at Bloomberg.
(Updated with links to articles, ECB news, Corrected to make clear banana prices in Australia will hit A$15 a kg, not NZ$15/kg. Australia does not import bananas and New Zealand imports from Ecuador. Unless Australia drops its import ban, this will have no impact on world banana prices, and even it it did, it would be marginal, Turners and Growers GM of Markets Alistair Petrie told me.)
25 Comments
Bernard
You do spout some drivel, The Banana price will rocket in Aus because they don't import (its protected), I doubt it will cause a blip here
Don't be a Banana Neven11...Bernie was just showing the Kiwi peasants what the cost would be in Kiwi$, because many of them think the world is flat and wouldn't know where Queensland was on a map.
Queensland????
Is that where Gay men come from, Wolly?
Neven911
You're right. Banana prices here won't be affected much. The NZ$15/kg should have been A$15/kg.
I've corrected the article to make clear banana prices in Australia will hit A$15 a kg, not NZ$15/kg.
Australia does not import bananas and New Zealand imports from Ecuador. Unless Australia drops its import ban, this will have no impact on world banana prices, and even it it did, it would be marginal, Turners and Growers GM of Markets Alistair Petrie told me.
cheers
Bernard
Oh thanks very much Bernard...there I was in armour out to save your %$#@ and now you drop me in it!
Sorry Wolly.
When I'm wrong I'm happy to fess up.
But you're right too in that the price of bananas in Australia will be NZ$15/kg or higher.
NZers living in Australia will sure notice. Lovin' the sentiment.
cheers
Bernard
That banana peel landed right under your foot Wolly.
Re record global food prices evidently Bernanke has confirmed that it's not due to quantitative easing...
Bernanke does not have enough credibility left to confirm anything.
The first comment on the article:
"Without exception, since taking up this post everything this man (The Ben Bernank) has said & done has been totally and categorically wrong. He was wrong on the US housing bubble, wrong on the bailouts, wrong on QE, wrong on interest rates and wrong on inflation.
To say that he is a pathological corrupt liar is understating matters, he his without doubt insane, it's the only rational explanation."
That´s the Ben Shalom that I know
Yes, he has reached the pinnacle of the mainstream economic's profession.
Was just being ironic ;-) Lot of bloggers venting their spleen about this over at zerohedge
http://www.zerohedge.com/article/watch-chairsatan-ben-lie-room-full-sycophant-journalists-live
But Ben Bernanke was #1 on "The FP Top 100 Global Thinkers" for 2009!
http://www.foreignpolicy.com/articles/2009/11/30/the_fp_top_100_global_…
WHAT A JOKE!
Bill English (fiddle) doing his jawboning best to hold the Kiwi down and pork those export numbers.
“it’s hard to see the general pressures that would push it up.”.....doh
So why is the Kiwi$ up right now Bill?...what's the reason why it is where it is?
Bill has clearly decided to go with the jawbone and to hope he alone can fool the fx dealers and fund managers and overseas buyers of NZ farmland...that he knows best...after all Bill has some very serious qualifications and experience in matter financial...hasn't he?
Big Tony Alexander, BNZ chief economist said in his weekly overview last night that we were technically back in a double dip recession:
"This week we have learnt that residential construction is sinking deeper into recession with December consent issuance the lowest since 1965. We have also seen the first recorded fall in the level of housing debt.
Export growth has just about stalled and import growth exceeded export growth in the December quarter so this will act as a drag on GDP. And y/day morning we learnt that the ever-volatile (and therefore to be taken with a grain of salt) Household Labour Force Survey showed the unemployment rate rising to 6.8% from 6.4% and job numbers falling by 11,000 or 0.5% during the December quarter.
But businesses appear increasingly willing to commit to new buildings and are importing more capital equipment which one hopes might work toward raising productivity. Plus job advertising on-line looks firm.
Overall the data gives little basis for claiming an acceleration in the pace of economic growth is underway and one now cannot rule out that the possibility that we have slipped back into a technical recession. Dang. " Thanks TonyIs there some definitional difference in economic theory between a "recession" and a "technical recession"?
yes Kate - with the second one, there's a spanner in the works.
I think a technical recession is when the data shows that to be the case, otherwise it's when people slip on a banana skin and swear there is a recession
Another wrinkle in the whole Yasi cleanup is the local MP, Bob Katter who is one of the independents propping up the Govt, along with no banana imports, I would imagine the aftermath will see a fair chunk of Federal funds heading up north to build new stuff.
Also how quick do banana trees grow? 'cause supposedly 80-90% of the industry was destroyed in Cyclone Larry in '06,
Re: price of Aussie bananas and their closed market - when I was in Australia in Nov/Dec I was amazed at the price of apples in the capital cities (Brisbane, Adelaide, Perth).
$A6/kg!!!
No wonder their growers have fought tooth and nail to keep our apples out. The Australian consumer is not well served by their agricultural protectionism is seems.
Iceland shows Ireland what to do.
Video interview with Denninger.
Something to learn for New Zealand?
What do you think?
http://www.youtube.com/watch?v=-MzzbDpRd7Y&feature=player_embedded#
Good thinking.
That’s what I think happening in most countries Gertraud and it is almost a situation without a way out - leading into political unrest.
http://www.youtube.com/watch?v=w-7xlT_cu7c
Not sure if the situation is quite the same for NZ at the moment as our bank majors (the big four Aussie banks) haven't been bailed out in the same way as was the case for both Ireland and Iceland - and hence our government debt/deficit (to be charged to the taxpayers over time) isn't causing the same injustice which faces the citizen/taxpayers of Ireland and faced the citizen/taxpayers of Iceland.
Additionally, we have a sovereign currency - which Ireland doesn't.
I think perhaps NZ would be better introducing capital controls to combat our high dollar; the government should work to curb imported inflationary effects by reducing prices on things it controls/owns (e.g. electricity prices, excise taxes, GST; LG rates increases etc.) and it should downsize its own non-essential activities (e.g. new roading, Quango activity etc.) as a means to reduce expenditure.
It should also introduce non-monetary benefit administration (i.e. benefit debit cards) to ensure that benefit payments cannot be used to purchase non-essentials such as alcohol, tobacco, pay TV, concert tickets etc.
But, as for Ireland - yes, I hope its people stand up for their own sovereignty and dump the bad banks and the Euro.
It was clear we were in a double-dip as early as October AND I distinctly recall commenting on here (along with Les Rudd and others) back in April, May that another recession was on the cards with the interest rate hikes (which Bernard et al thought was bonkers - but where are those 9% floating rates in 2011 now Bernard? Still waiting for the footage of the cup of coffee on your head!)
It's remarkable that it takes till 5 weeks AFTER the period is finished and the data is coming out for the bank economists to even admit there was a possibility of a double dip. Surely the other hopeful predictors (Roger J Kerr amongst them) now have some egg or in the case of Bernard some coffee to wipe off their faces.
Given that during the "recovery" we never came close to getting GDP back to where it was before the recession. Will the WHOLE period now be redefined as a double-dip recession - hence a recession of 3 and a half years not just 5 quarters plus 2.
hopefully Bernard will stop publishing Kerr's garbage, he is so frequently inaccurate, its reducing this site's credibility
I want to see some more Rodney Dicken's stuff, he IS good
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