90 seconds at 9 am with BNZ

90 seconds at 9 am with BNZ: NZ$ bounces back a bit from Key comment; Aussie GDP strong; Bernanke may print more; Oil hits US$102/bbl

3rd Mar 11, 9:02am by Bernard Hickey

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the New Zealand dollar recovered somewhat overnight after sliding more than 1 USc in the wake of comments by Prime Minister John Key that he expected the Reserve Bank would cut the Official Cash Rate next week.

See our interactive chart below.

Meanwhile, Key also said he was looking at potentially cutting Working For Families for wealtheir families to help pay for Christchurch quake damage.

See Alex Tarrant's article with more details and my video commentary here.

Meanwhile in Australia, fresh data showed the economy there grew 0.7% in the December quarter, in line with economists' forecasts and a rebound from the September quarter.

Australia is benefiting from an historic jump in commodity prices, although spending by heavily indebted households remains weak. See more here from Bloomberg.

In America, US Federal Reserve Chairman Ben Bernanke has left open the option of printing more money to fire up the US economy. He once said famously that the way to restart an economy facing deflation was to tip money out from the door of a helicopter on the economy below.

No chart with that title exists.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

25 Comments

by Wolly | 3rd Mar 11, 9:11am 1299096660

Bernanke is a printer...member of the Printers Union of America!

Key should have kept hs gob shut.

Bollard is about to let us all know whether he supports savers and an economy built on strong savings....or a toady to the banks and a firm believer in the sound policies of greater debt and permanent serfdom for a third world NZ economy.

Oil is up a good 10% since the start of the year..count on another 10% lift by the end of the year...now go factor that into your pipe dream about the benefits of a lower valued Kiwi$ on the back of a Bollard cop out.

by Rob of the North | 3rd Mar 11, 9:41am 1299098479

i agree with you , Wally...not sure what game Johnny Key was playing there.

Given petrol is rocketing and food prices are pumping etc i persoanly doubt Bollard will cut the rate as inflation sneaks around in the shadows.

Ask me who's glad he's holding all those blue chips OZ gold stocks,huh?

by Andrewj | 3rd Mar 11, 10:09am 1299100161

Alert: 3/3/11- What banks want is what banks get. They marched Tbill tender rates down ~25bps. The government's maitre d'hotelconfirmed the order and no doubt the RBNZ's head waiter will deliver it, next week.

http://omo.co.nz/

by Sam | 3rd Mar 11, 10:43am 1299102183

Mate if your holding Aussie mining stocks you getting a capital gain from the general rising tide of commodity inflation and a currency gain with the NZD pretty much s**tting itself. The currency gain can only be realised if you bring your money back and I can't see anyone being in a rush to do that anytime soon. I'll be bringing my money back across the tasmen in about 4 years to buy a house but it may not be in Christchurch as this place is finally beginning to give me the heebie geebies with all these aftershocks. They never used to worry me but these things have a way of eventually wearing you down. Still, when the quakes settle here and everyone who will be leaving this city leave for good, there could be some property bargains down here for the brave. Time will tell on that front though.

But back to the NZD. If Bollard cuts the rate here, and the ozzies increase theirs (which is quite likely) then the NZD will blow out unbelievably against the aussie. Sometimes I can believe what I am seeing or hearing. A committed property investor mate of mine last week actually admitted that he reckons he may have made a mistake buying a rental propery down here in CHCH. A change in the tide - unbelievable.

by Andrewj | 3rd Mar 11, 11:32am 1299105156

Sam, if Bernake doesn't do QEW lll in July, commodites will tank and the banking casio's will dump commodity currencies, the Aussie dollar will be in foir a rough ride.

by Wolly | 3rd Mar 11, 11:51am 1299106296

That's right Sam....it all depends on Bernanke continuing to bullshit the American public and lie like buggery about the rort he is up to....long live the bankers ...may they enjoy fatter bonuses forever...

Pssssst ........wanna buy a vineyard Sam?

by Rob of the North | 3rd Mar 11, 11:44am 1299105842

Fortunately, Sam, i have an OZ bank a/c which is gettable after lot of paper work but worth it.

Any sales of Oz stocks go in there and alot of it went in at the time the dollar was 0.83 against the kiwi so i'm now well in front.

tell your mate he's not alone investing in property down Ch CH..THE MAN is also a big fan of doing that..

by Julz | 3rd Mar 11, 1:35pm 1299112531

Your logic makes no sense to me

fact - oil and food prices have increased globally

fact - we have to pay for these price increases like everyone else in the world so there will be some corresponding inflation

fact - increasing the OCR does nothing to stem global oil and food prices it can only impact wage inflation which is not a problem in our current slow economy

fact - the only thing not reducing the OCR will achieve (or raising it) is inflate the NZD and strangle our economy further

There is no return to reckless borrowing happening, everyone is desperately trying to pay down debt. So why are you are trying to remove what little spare cash they have for reducing their debt by arguing for a higher OCR???

by Roelof | 3rd Mar 11, 9:30am 1299097842

Thinking out loud.... NZ still has issues with savings... lowering interest rates in the wake of the earthquake is not going to help these structural imbalances.

Why doesn't the GOVT issue tax free earthquake bonds ?????

A one off $5 billion dollar issue at 2-3 %....

I'm sure there are a lot of people who would view this as a way to help and also make a return on savings..?????

The sad truth is that NZ has to take a couple of steps backwards before going forwards.

it is not about "growth" anymore ... it should be about rebuilding and starting again....

Sent a shiver down my spine when I read about the Auck super city wanting to borrow offshore in foreign currencies.... Rodney Hide... what have u created...???? (The maori statutory board taking the council to the high court ... using council money.. seems like madness to me )... Hides' creation reminds me of Muldoons "think big"... I don't see any efficieny gains coming from this ..at all

cheers Roelof

by powerdownkiwi | 3rd Mar 11, 9:38am 1299098286

Roelof - the Auckland move was always a pre-meditated grab (honouring the "no Govt asset sales in the first term") at public assets - it was the 'Utilities' when you can't get 'Park Lane'.

Yet.

It wasn't about 'efficiencies', although it was about eliminating public representation - read: voice.

by Kate | 3rd Mar 11, 9:57am 1299099474

it was the 'Utilities' when you can't get 'Park Lane'.

And Rodney's payday awaits! Just watch, when he loses his seat this election (I'm guessing he won't even stand) - there will be many a PPP board that opens their arms to him. Likely lining up the appointments as we speak.

by Rob of the North | 3rd Mar 11, 9:44am 1299098678

Oh, no..powerdown...so theirs a dicktatorship on it's way for all us kiwis?

compulsory listening to party propaganda in our lunchtimes on the Nat Radio no doubt?

you're da voice, try and understand me etc..i'm fleeing to russia right now..where's gummy btw and christ-ove ?

by powerdownkiwi | 3rd Mar 11, 11:16am 1299104162

No Rob - the Baron/peasant, boss/worker, rich/poor, yin/yang has gone on forever.

The difference now, is that we're into scarcity of the ultimate kind.

Never been there before, globally.

You can see water (for instance) as a strategic asset, if you want. I see it as a prerequisite for life.

Kinda shifts the goal-posts.

And the price of freedom (read, access to water) is eternal vigilance.

by Muppet King | 3rd Mar 11, 10:03am 1299099788

Off on a total tangent here, but anyone heard about the company loaning Serepisos the money? Its a total scam lol, the website for the company is hilarious, its basically there to convince you that its not a scam, with most of the pictures of the owner with the spanish football team and a shot of his private Jet, absolutely classic. Just thought I'd add my bit in

by FCM | 3rd Mar 11, 10:28am 1299101330

WFF will need to go, the true cost of Earthquake will start to ripple through to the whole of NZ soon. There is going to be a lot of unemployment in the short term, the longer term there will be some gains but the rebuild will need help from offshore this time, ACC goign to take a huge hit, and all your premiums etc for all of NZ will go up, OCR will get cut, NZ dollar drop and up goes your gas..the ripple just like an earthquake will start to hit.

by Sam | 3rd Mar 11, 10:46am 1299102419

Mate I couldn't agree more. There is going to be no painless way out of this mess.

by anonentity | 3rd Mar 11, 11:59am 1299106747

All the prisoners that are locked up for non violent offences..all the kids that cant get jobs,,all the volunters..all the these people along with the army could go through the place like a dose of salts.If this asset was used the quake costs could be minamalised.I dont hear or see much happening in this department....

by Mark | 3rd Mar 11, 11:43am 1299105832

How on earth can you measure inflation without taking into account food and energy??!! That seems completely bogus.

by Wolly | 3rd Mar 11, 11:48am 1299106080

It's easy Mark...first you decide on what you want the sheeple to be told in the poodle media....then you cook the index and shuffle the deck to make the game fit the answer..hey presto inflation is not a problem. Works every time. Every govt is doing it.

by Mark | 3rd Mar 11, 12:06pm 1299107198

Surely it's completely meaningless without these two (massive) factors taken into account. Is this the same for our inflation figures??

by Wolly | 3rd Mar 11, 3:03pm 1299117833

Mark...don't get so hung up...chill out...an index is a tool to allow results to be decided upon in advance...you come up with a figure for inflation over 3 months to be .5% and load that into the model...wizz bang click out comes the required changes to the index...it's the way of the world mark...govts lie.

Unemployment numbers are worked in the same manner. What would you like next time up?....

by Gareth Vaughan | 3rd Mar 11, 12:37pm 1299109036

OECD says food price crisis not as bad as 2008 due to rice price lagging - http://noir.bloomberg.com/apps/news?pid=20601109&sid=ajuj8CHjrIcw

by Andrewj | 3rd Mar 11, 12:38pm 1299109133

Black Swan?

http://www.telegraph.co.uk/finance/markets/8358176/Saudi-Arabia-contagi…

Saudi Arabia’s Tadawul stock index has tumbled 11pc in wild trading over the past two days, led by banks and insurers. Dubai’s bourse has hit a 7-year low.

The latest sell-off was triggered by the arrest of a Shi’ite cleric in the Kingdom’s Eastern Province after he called for democratic reforms and a constitutional monarchy. The province is home to Saudi Arabia’s aggrieved Shi’ite minority and also holds the country’s vast Ghawar oilfield, placing it at the epicentre of global crude supply.

by FCM | 3rd Mar 11, 1:45pm 1299113131

Could not agree more..re training the unemployed to work in construction and rebuilding must be a priority. We were trying to work out the logistics here..a fiqure of 5,000 houses as needing complete re- building...even if one company (Insurance) had a contractor with 150 builders...4 builders per house..five months to finish a house ..that is only around 85 houses rebuilt a year...this puts it in perspective the short fall in labour in regards to rebuilding..and this does not even take into account the commerical stuff.

by Wolly | 3rd Mar 11, 2:57pm 1299117458

Unbelievable....arguing over who will swing the hammers when it'll be 12 months before a start is made to sort out whether the land can be built on or not. Most of it is porridge now full of sewage!

The first new Suburb could be called "Shipley's Farm"...now that would be a good spot. new roads and services with light rail to town. Who could moan about that!

Ballot the property owners and have a draw to see who gets what. Cheaper and quicker all round. Stable ground. Clean air. Closer to Ashburton that way.