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BNZ Weekly Overview


BNZ Weekly Overview

The key points of this week's publication include the following.

Tight Labour Market But Low Wage Rises

We present data showing a tight labour market but good business capital spending growth which is increasing productivity vital to moving up the OECD ladder. But why isn't wages growth accelerating? Why are employees not taking advantage of their bargaining power (be they on collective or individual contracts) to seek more money?

And is it possible that our fixation on 1-3% inflation is preventing businesses from raising selling prices given that fewer than 50% cite finding more customers as the main reason they can't sell more product.

Unless we see some price response via accelerating growth in wages, consumer and industrial goods prices to reflect worsening capacity and product shortages then one has to question just how much the free market is really operating in New Zealand.

BNZ EuroStock Funds Returned

We discuss the low return on this product to us investors over the past three years but how by taking exposure to European equities this way rather than in an unhedged non-capital guaranteed fund one is around 43% better off.

US Jobs Data Awaited

In global interest rate and exchange rate markets the focus is all on Friday night's US labour market data for April. If another strong gain near March's 308,000 is reported then the USD will rise, NZD fall, and long term interest rates jump higher. If the result is weak ? say near zero - then the USD will fall, NZD jump up, and long term interest rates decline.

The Weekly Overview is freely available to all BNZ staff, customers, and the public with a centralised EMAIL ONLY distribution list managed here. If you wish to add, change or delete an email address please reply to this message or email tony.alexander@bnz.co.nz. Sections of the WO may be reproduced by anyone other than mortgage brokers provided the BNZ is noted as the source.

Best Regards

Tony Alexander Chief Economist Bank of New Zealand

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

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Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

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I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

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Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

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Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

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