- NZ rates on hold for extended period – NZD weakens
- Sterling up on positive property survey
- International Monetary Fund warns Greece may have to leave the Euro
The Reserve Bank of New Zealand (RBNZ) left their base rate on hold at 1.75% when they met overnight. That was entirely in keeping with forecasts, but they also voiced concerns over the strong NZ Dollar. They didn’t offer any solution to that problem, but we suspect they will keep the NZ base rate on hold for an extended period; maybe a year or more. The NZD lost half a cent or so against most currencies after the announcement, but it had already weakened by a cent or so in the run up to the event.
We also heard from the Royal Institution of Chartered Surveyors (RICS) overnight. Their UK house price balance tests how many estate agents see the market improving compared to those who are gloomier. The 25% positive balance was better than expected and Sterling strengthened as a result. However, the new second home tax is taking its toll and it is reported that many landlords are suggesting they will reduce their portfolio sizes in the coming years; putting upward pressure on rental prices.
Greece is having problems with the rest of the Eurozone regarding its debt levels – highlighted by the International Monetary Fund (IMF). The IMF warned that Greece risks being forced to exit the Euro if things cannot be tied down and the German Finance Minister concurred. With the threat from Marine Le Pen seeking a French exit from the Euro – and perhaps the EU itself – this could be a growing threat to the Euro’s very existence. Definitely a story to watch – and one that has the capacity to significantly weaken the Euro. Euro sellers beware.
There is a distinct lack of significant data today, other than Canadian housing market data and what is expected to be a mixed bag of output data from South Africa. We expect mining output to have risen, but manufacturing to have slowed. The Rand is likely to tread water unless these forecasts prove to be wayward.
And I bring news that there is some humanity in the world of courts. Sarah was brought to court in Providence, Rhode Island, after she had illegally parked in a restricted zone. When Judge Frank Caprio heard the charge against her, he laughed and dismissed the case. There were restrictions between 8:00am and 10:00am and Sarah parked her car at 9:59 and 58 seconds. The fact that someone thought it was worth wasting court time over two seconds beggars belief.
English is tricky – here are some examples
1. The bandage was wound around the wound.
2. The farm was used to produce produce.
3. The dump was so full, it had to refuse more refuse.
4. We must polish the Polish furniture.
5. He wanted to lead the men fitting lead to the roof.
6. The soldier decided to desert his dessert in the desert.
7. She thought it was time to present the present.
8. A bass was painted on the base of the bass drum.
9. I did not object to the object.
10. The insurance was invalid for the invalid.
11. The oarsmen had a row about how to row.
12. They were too close to the door to close it.
13. That buck does love it when the does are around.
14. The dressmaker was a skilled sewer until she fell down the sewer.
15. To help with planting, the farmer taught his sow to sow.
16. Using wind power to wind the mill’s sails
Today's Major Economic Releases
||Canada:New Housing Price Index month-on-month
||US: Unemployment Claims
||US: Final Wholesale Inventories month-on-month
||Bank of England Governor Carney Speaks
Daily Currency Analysis by David Johnson