Over the past three trading days, the New Zealand has finished top, bottom and bottom of our one-day performance table. Yesterday, after a worse than expected set of merchandise trade figures, NZD/USD was back on a US 72 cents ‘big figure’ and a break down through technical support in the 0.7275-80 area, has seen the Kiwi extend the its weakness down to a low around 0.7215. This has pushed the AUD/NZD up on to a 1.08 ‘big figure’ for the first time in a little over two weeks.
ANZ’s monthly business outlook is published today. A net 19% of businesses are pessimistic about the year ahead, versus 38% in December. All five sectors improved this month with retail firms the closest to a positive outlook at -4%. Firms’ views of their own activity (which has the stronger correlation with GDP growth), lifted from +16 to +20. The analysts note, “A slower housing market, a small dip in net migration, difficulty finding credit and already stretched construction and tourism sectors are making acceleration hard work from here. But strong terms of trade and a positive outlook for wage growth are providing a push… Our composite growth indicator, which combines business and consumer confidence, suggests growth around 2-3%. Although we are constructive on the medium-term outlook (with incomes supported by the strong terms of trade and higher wage growth), we are conservative in our productivity growth assumptions and believe households need to rebuild their saving. We accordingly see downside risk to both the Reserve Bank’s and Treasury’s growth forecasts”.
Separate figures show New Zealand's visitor arrivals dropped for the first time in five years in January as fewer Chinese tourists visited the country, although though statistics officials said that was largely due to the timing of Chinese New Year, which this year fell in February. The country's annual net migration also eased off recent highs as government regulations introduced in the middle of last
year came into force. On an annual basis net migration was 70,100, down from a record high of 72,400 in July. However on a monthly basis, the country posed a net gain of 6,210 permanent and long-term migrants in January compared to 5,780 the previous month. Statistics New Zealand said there had been a dip in migrant arrivals on student visas from India and China, New Zealand's two largest education markets, down around 8 per cent to 11,100. The overall number of migrants arriving on student visas was 24,100 in the year to January 31, 2018, down just 150 from the preceding 12 months. The Kiwi Dollar opens this morning in North America at USD0.7225 and NZD/CAD0.9225.