Here's my summary of the key issues from over the weekend that affect New Zealand, with news of concerns about policy decision security at the Reserve Bank of Australia.
But first, American home resales volumes rose modestly in February but a persistent shortage of properties on the market spurred the biggest price jump in a year, up +7.5% above the same month a year ago to a median of US$202,600 (NZ$265,000).
Mario Draghi said overnight the ECB will purchase large amounts of public and private debt for at least 18 months and until it is convinced that inflation will stabilize near annual rates of 2%.
But his new bond-buying policy is seeing a 'torrent of cash' leaving Europe and pushing up the US dollar - and the NZ dollar too - and making the debts of emerging economies much harder to repay according to Moody's. The exchange rate shift is much worse for them than the low interest rate advantages.
In Greece, the tragedy rolls on. Greece’s finances have deteriorated as anxiety over whether there will be another bailout and has spurred another spike in bank withdrawals. Tax collections have also plunged, raising questions about whether the new government will be able to pay state workers and meet other obligations. Even as talks go on outside the country, Greece's naive new government is watching the start of a collapse at home.
On a different note, here's something technical to look forward to. Chemists have developed a non-stick coating for the inside of bottles that will allow all the ingredients to flow out without any sticking to the sides. It is a feature that is licensing now and will be in your supermarket quite soon. It is an innovation that will reduce a lot of waste and is another example of relentless productivity.
In New York, the UST 10yr yields were unchanged overnight at 1.93%. The New Zealand swap curve is maintaining its very flat structure.
The crude oil price rose marginally to US$47/barrel and Brent crude is at $55 a barrel. Commodity price movements today were more about the falling US dollar than anything else.
The gold price is holding at US$1,183/oz.
The New Zealand dollar starts today with another jump and we are now up to 76.3 US¢ which is more than 3¢ higher than at the start of last week, it is at 97.1 AU¢, and the TWI is at 80.6.
And earlier this month there was a sudden jump in the Aussie dollar ahead of the RBA’s interest-rate decision and now regulator ASIC is looking for potential sources of a leak of the decision early. The Australian dollar jumped more than 0.6% in the minute before the central bank unexpectedly refrained from cutting rates on March 3. Another rate cut is now being expected by markets.
If you want to catch up with all the local changes on Friday, we have an update here.
The easiest place to stay up with event risk is by following our Economic Calendar here »
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