BNZ Weekly Overview

Welcome to the March 5 2009 issue of the BNZ Weekly Overview.

This week we are running our first monthly survey for the year. If time permits please click on the URL below and let us know whether you think the economy will get better or worse in a year's time. And if you have a minute to spare let us know in a couple of sentences how things are in your industry at the moment specifying what the industry is. Many thanks to those who have participated over the past four years. The results will be released early next week.

http://survey.usuite.com/survey/7f801dd05f3742619b046cc119c15106.sur

There was some excitement earlier this week when the Kiwi dollar fell to a six-year low against the greenback but we end this afternoon barely changed from last Thursday just above 50.0 cents. Short-term wholesale interest rates continue to decline in expectation of the Reserve Bank cutting the cash rate at least 0.5% next week. But at the longer end of the curve there is some upward movement with more and more corporate borrowers deciding to fix medium to long term now rather than punt on lower rates in a few months or weeks time.

During the week we have seen three important developments supporting our view that the New Zealand housing market has limited further downside. Dwelling sales and prices picked up in February in Auckland according to Barfoot and Thompson, the migration numbers improved for the second month in a row, and new dwelling construction looks set to be the weakest since the 1960s. Heck, we even learnt during the week of a 16.6% rise in international dairy prices. But offshore data remain appalling and it looks like Australia is in recession.

ends

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