The Crown accounts for 3 months to September reveal OBEGAL in deficit by -$2.5 bln which was lower than the -$2.7 bln forecast. Wherefrom that improvement?
- higher taxes on companies.
- higher taxes on individuals
- higher GST y-o-y
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The Crown accounts for 3 months to September reveal OBEGAL in deficit by -$2.5 bln which was lower than the -$2.7 bln forecast. Wherefrom that improvement?
- higher taxes on companies.
- higher taxes on individuals
- higher GST y-o-y
We ARE... gearing up to deal with our overdependence on China, so our economy, currency and prosperity are not held to ransom by what happens in China, or what China does or does not do.
Politicians from New Zealand's two main parties were either doubling down on promises already released or repeating the bold ones already made at the India Business Summit in Auckland [last week] ...
https://businessdesk.co.nz/article/o...paign=nzh-home
...."and in other news, (also from the Crown, Sep 30, accounts) Govt. net debt was a massive $5.6B higher than 'forecasted' just 2 months ago, at the Sept 12 PREFU".
A few more fiscal skeletons to come out of the closet over the next few weeks & months? If so, those who are long on the kiwi should probably be aware, very aware.
New Zealand’s fiscal position has been recognised by global credit rating agencies. S&P Global Ratings and Fitch Ratings both reaffirmed New Zealand’s domestic currency ratings, at AAA and AA+ respectively, in September 2022, while Moody's Investors Service sovereign credit rating for New Zealand has been maintained at Aaa since 2002.
Attachment 14833
I am aware that the long-term projections of net debt (both the new and the old net debt measures) in the Budget Update show a DECLINING trajectory https://budget.govt.nz/budget/2023/w...bt-measure.htm
Let us also not forget that Currencies derive their value by comparison.
… and New Zealand continues to have some of the lowest public debt in the world
Attachment 14834
Even at its peak, New Zealand's net debt as a share of GDP remains low compared to many of our international peers.
The International Monetary Fund (IMF) publishes a general government net debt indicator which is an internationally comparable measure of net debt. This indicator shows New Zealand's net debt at 24.1 percent of GDP in 2024, compared to 13.9 percent in Canada, 38.2 percent in Australia, 98.2 percent in the UK and 99.8 percent in the US (Figure 10).
https://budget.govt.nz/budget/2023/w...bt-measure.htm
BOND TENDER AWASH IN OFFERS
131 bids worth $2.0 blm were staked for the $500 mln NZGBs on tender today. Ten bids won the May 2030 $175 mln at 4.92%, down a sharpish -27 bps from one week ago. 17 bids won the May 2032 $225 mln at 4.98%, down -36 bps from 4 weeks ago. And just seven bids won the April 2037 $100 mln at 5.14%, up +1 bps from eight weeks ago. That leaves $1.5 bln in cash on the table unsatisfied and looking for a home.
Kiwi bears should be aware, very aware - that the winds are changing. And the market knows, as you can see from the latest results above...
Powell says:
- Fed is ‘not confident’ it has done enough to bring inflation down to its desired 2%, BUT Risks between doing too much and too little have come into closer balance.
- Fed remains steadfast in getting Inflation to 2%, expects getting it sustainably down to 2% has a long way to go, BUT is gratified by [inflation falling] progress
- Inflation is “well above” where the Fed would like to see it (2%), BUT Fed is attuned to the rise in Treasury yields, and policy is “significantly restrictive.”
- Fed is “attentive” that stronger-than-expected growth could undermine the fight against inflation and “warrant a response from monetary policy", BUT Expectation is for growth to “moderate in coming quarters”
Yet, the media picked up only on the 'not confident' and USD rose against all major currencies. It rose higher against most major EM currencies. NZD fell too, but less than most G10.
Interestingly, Treasury yields also rose after having fallen for over two weeks: 2yr +10bps to 5.032%, 10yr +11bps to 4.637% and 30 yr +12bps tp 4.772%.
No one picked up on what he said about the challenge posed by keeping rates anchored near zero, where they were before the inflation surge.
Powell said it is “too soon” to say whether zero-rate challenges are “a thing of the past.”
https://www.cnbc.com/2023/11/09/powe...tion-down.html
Are you in a massive NZD long position beacon?
I am long NZD, yes - with reason/ reasonable justification to be so, IMO.
Massive is a relative term. But if you are asking if I have so much, it is making me desperate, then No.
I write, because I am amazed at the sole focus markets the world over have on central bank actions at the moment, at the expense of everything else - including fundamentals (especially for NZD).
Will I be desperate if there is a black swan - which makes NZD USD fall down to 55/56c and I keep buying? No, but it may be embarrassing to have been so wrong in public. I may stop posting more here.
Moody’s cuts U.S. outlook to negative, citing deficits and political polarization
“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.” https://www.cnbc.com/2023/11/10/mood...-deficits.html
Back in August, Fitch cut the U.S. long-term foreign currency issuer default rating to AA+ from AAA, citing “expected fiscal deterioration over the next three years,” as well as an erosion of governance and a growing debt burden.