Welcome to the March 6 2008 editions of the BNZ Weekly and Offshore Overviews.
This week we are running our monthly survey of the confidence of Weekly Overview readers. This survey is the first available each month showing what people are generally thinking out there so it would be great if you have the time to click on the URL below and let us know whether you think the economy will get better or worse over the coming month. More importantly, if time permits pen a sentence or two telling us how things are in your particular industry at the moment specifying what the industry is. The results will be sent out Monday afternoon.
This week we have seen the Kiwi dollar edge back slightly from last week's unusual high to end just over 80 cents with some assistance from the Reserve Bank continuing to stress inflation risks in its official cash rate review this morning. As expected the rate was left unchanged at 8.25% but strong downside growth risks were also stressed. In contrast across the Tasman the Reserve Bank of Australia raised their cash rate to 7.25% and there remains some chance they could go again. Having said that we are receiving weaker data on the Australian economy with regard to retail spending and household borrowing.
In the United States data releases over the week have been largely negative although a report on the services sector last night wasn't as bad as thought. In the United States what really matters is the jobs report out tomorrow night which may or may not show a repeat of Januaryâ€™s decline in job numbers.
In Japan businesses have been cutting back on their capital spending, confidence levels are low, and immediate growth prospects do not look that flash. In spite of that the Japanese yen has risen to a three year high against the greenback this week with investors scared of taking on overseas risks.
In China data releases have been rare this week and the outlook remains for one of tightening monetary policy to contain inflation currently at 7.1% but with growth still likely to come in above 10% this year.
In the United Kingdom consumer confidence remains poor but a couple of readings for the manufacturing and services sector were slightly stronger than expected. Mild growth remains in prospect. And finally, in Europe data releases continue to validate the decoupling theory especially with the German economy looking relatively good.