New Zealand's trade deficit shrank to $1.709 billion in October 2023 from $2.315 billion in the same month of the previous year.
Exports down 9.3% to $5.4 billion, imports down 14% to $7.1 billion.
source: Statistics New Zealand
Go NZD :t_up:
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BNZ head of research Stephen Toplis says movement in the labour market is nothing short of startling. “Businesses have rapidly moved from not being able to find staff, for love nor money, to having choice in who they hire.”
This is best seen in NZIER’s QSBO which shows the ease of finding skilled labour improving markedly and labour turnover tumbling. Both of these variables are key indicators for future wage inflation. This, plus feedback from businesses, convinces us that wage inflation has well and truly peaked, Toplis says.
https://tmmonline.nz/article/9765225...ts+will+start+
Adding to the OCR [cuts next year] expectation, high interest rates have also depressed consumer spending – down 3.7% over the past three quarters and falling.
https://tmmonline.nz/article/9765225...ts+will+start+
I'm surprised the NZD isn't tanking based on those numbers.
RBNZ wanted consumer, corporate and Government to control spending. It is happening, leading to small but continuing successes in controlling Inflation and inflation expectations, without lifting OCR.
Plus National Government to form. Stimulation and growth to come with tax cuts, which while inflationary - strengthen NZ economy. Strong economy growing again = currency should keep getting stronger.
US and China are talking and trading again, which benefits China - and their proxy antipodeans. Why are we still below 62c?
I look at it differently.
If inflation is under control & the economy is weakening with consumer spending down then the likelihood of a rate cut sooner rather than later.
If there is less yield comparative to other currencies then we should see the Kiwi weaken against them.
If NZD can hold above 60.5c I think the lows are in. Happy to have hedged a crapload of future USD earnings under 59c the last few weeks.
It's not holding that now trading 60.25 but overall I think 59c will prove to be a good level. I regret not buying at 0.5780, however I'm not sure NZD weakness has played out fully yet and I look at the Aussie cross thinking the NZD is still relatively strong.
I have no axe to grind here and I think any level sub 60c is a pretty good level when you look historically.
Only time will tell.
Beacon, better news, yes. But lest not forget that we are still running a monthly trade deficit of $1.5+ BILLION. Keep this behaviour up (living beyond our means) and the country will ultimately be poorer for it....leading to further value destruction of our currency.