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TD Securities: A (Hopefully Quiet) Week Ahead

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Fuseworks Media
Fuseworks Media
TD Securities: A (Hopefully Quiet) Week Ahead

Country Time Event Consensus TD Securities New Zealand 3pm NZT Non-resident bond holdings - - Comment: Always worth a quick glance, last reading 73% (this is bond holdings only not notes or bank bills). Peaked around 77% mid-2008. Highly-watched correlation with the NZD. Tuesday 18 August Country Time Event Consensus TD Securities Australia 11:30am AEST RBA August Board meeting minutes (after shifting to a neutral bias) -

- Comment: The Reserve Bank's decision to leave the cash rate again at 3% was not the market mover, but the formal dropping of the easing bias was a key step. After the very upbeat testimony Friday from the RBA Governor, we wonder how long it will be before a tightening bias creeps into these communiqus. These minutes could be seen as "old news" after Friday's blockbuster "emergency cash rate" revelation, but its still worth ploughing through the notes for new twists in the Board's thinking. Wednesday 19 August Country Time Event Consensus TD Securities New Zealand 10:45am NZT PPI, Q2 - Input -5%; Output flat Comment: The surging NZD and falling commodity prices means input prices should have contracted sharply in the June qtr. However, business surveys suggest that output prices are more likely to be stable, rather than falling. Australia: Treasury Secretary Ken Henry speaks to the Australian Economic Forum at lunchtime (1:30pm) on "Implications of the Tax Review". Of interest to Australians to pay tax, but it is highly unlikely to generate financial market headlines. Thursday 20 August Country Time Event Consensus TD Securities Australia 11:30am AEST Imports, July - - Comment: Not forecast but a key input into trade balance data. This first taste of Sept qtr trade will shape expectations for capital and consumer goods. Country Time Event Consensus TD Securities Australia 11:30am AEST RBA Bulletin containing FX transactions -

- Comment: The RBA Bulletin can be ignored for months at a time but suddenly it's fashionable again to note RBA selling of AUD into the appreciation cycle. The last two months of selling ($A1.433b for May and $A1.943b for June) is the strongest outright selling since 2003/04. Cannot rule out another $A1b or so for July. Idea of the week: RBNZ to step up After the relatively strong language from the RBA on Friday (at the Semi-annual testimony) it is time for the RBNZ Governor to step up and remind the markets that it has a strong tilt towards easing. Indeed, at the 30 July OCR Review the RBNZ made a strong point of difference by not adopting RBA Governor's strongly-worded speech at the Anika Foundation lunch a few days earlier. Now that the RBA has roared again, it is timely for the RBNZ to re-emerge and remind the market of the fragilities of the New Zealand economy, and that easing is a long way off. Opportunities to receive New Zealand short end and perhaps look to lighten up exposure to the NZD may be timely. Trade update: watch this space After the rollercoaster that was the RBA testimony Friday, the markets were upended Friday night after a surprise soft US consumer sentiment reading. In fact it was probably some much needed balance into market pricing. The Aussie market ran too-hard and too fast on expectations of aggressive cash rate increases. Opportunities in the Australian market to arise soon.

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