Contrary to the bankers claiming digital payments are replacing cash, yet more evidence is showing that use of cash is on the RISE! We look at data from New Zealand based on a recent survey as the Reserve Bank there announces pilots to make access to cash easier.
The trend of rising cash use was in fact confirmed recently by the RBA too, though their surveys are just not up to the New Zealand standard, and of course using cash more is also rising in the UK.
Not only is the ongoing use of cash a human right, a protection of freedom, and cheaper than other payment means, but it is also proving to assist households with their budgetting. Do not believe the bankers’ BS…
RBNZ Short: Why Access To Cash Is Essential For Social Cohesion Short: https://youtube.com/shorts/d32BqMmfwUc
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We had important releases from Stats NZ and The New Zealand Central Bank, which combined highlights a weird and unsettling cognitive dissonance. It was perhaps a matter of perspective, because the focus was on the financial system, not individual households, but given the economy is so strongly connected to what households and businesses do, the stability report appeared unanchored from reality, especially given the prospects of higher rates for longer.
And many of the themes we look at here, are relevant to other economies, including Australia too.
http://www.martinnorth.com/
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Digital Finance Analytics (DFA) Blog
Kiwi’s Cracking Under The Pressure, But RBNZ Says Nothing To See Here!
We had important releases from Stats NZ and The New Zealand Central Bank, which combined highlights a weird and unsettling cognitive dissonance. It was perhaps a matter of perspective, because the focus was on the financial system, not individual households, but given the economy is so strongly connected to what households and businesses do, the stability report appeared unanchored from reality, especially given the prospects of higher rates for longer.
And many of the themes we look at here, are relevant to other economies, including Australia too.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
In an increasingly globalized workforce — which intensified in the wake of Covid-19 as nations looked to fill acute worker shortages — New Zealand is a desirable destination. It was ranked the most attractive nation in the OECD for skilled migrants, according to a 2023 report by the Paris-based organization, which rated the country highly in categories such future prospects, family environment and inclusiveness.
But the volume of arrivals is now raising concerns about pressure on infrastructure, rising house prices and the ability of the economy to meet the extra demand for goods and services. That could in turn fan inflation, compounding the strains.
“Very strong population pressures will continue to stress the economy,” said Kelly Eckhold, chief New Zealand economist at Westpac in Auckland.
The Reserve Bank of New Zealand has picked up on the trend, citing the impacts of high immigration on house prices and rents. That may see it hold its benchmark rate at 5.5% until the end of this year or into 2025, even if global peers begin to lower theirs, though even that is less certain now.
And as we look are Ireland, the UK and Australia, its the same story. High migration lifts housing costs and drives inflation. Time for politicians to flex their strategies, as New Zealand and Canada have already done!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
In an increasingly globalized workforce — which intensified in the wake of Covid-19 as nations looked to fill acute worker shortages — New Zealand is a desirable destination. It was ranked the most attractive nation in the OECD for skilled migrants, according to a 2023 report by the Paris-based organization, which rated the country highly in categories such future prospects, family environment and inclusiveness.
But the volume of arrivals is now raising concerns about pressure on infrastructure, rising house prices and the ability of the economy to meet the extra demand for goods and services. That could in turn fan inflation, compounding the strains.
“Very strong population pressures will continue to stress the economy,” said Kelly Eckhold, chief New Zealand economist at Westpac in Auckland.
The Reserve Bank of New Zealand has picked up on the trend, citing the impacts of high immigration on house prices and rents. That may see it hold its benchmark rate at 5.5% until the end of this year or into 2025, even if global peers begin to lower theirs, though even that is less certain now.
And as we look are Ireland, the UK and Australia, its the same story. High migration lifts housing costs and drives inflation. Time for politicians to flex their strategies, as New Zealand and Canada have already done!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
US Federal Reserve chairman Jerome Powell has confirmed fears that interest rate cuts in the US would be later rather than sooner as inflation remains stubbornly high. If that price pressure persists, the Fed can keep rates steady for “as long as needed,” Powell said. This came after US retail sales figures for March came in much stronger than expected, stoking speculation rates would stay higher for longer.
This is a theme reinforced by the IMF, who published a report, while data form the UK and New Zealand also reconfirmed the stickier story.
The risks to markets and households are rising.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
US Federal Reserve chairman Jerome Powell has confirmed fears that interest rate cuts in the US would be later rather than sooner as inflation remains stubbornly high. If that price pressure persists, the Fed can keep rates steady for “as long as needed,” Powell said. This came after US retail sales figures for March came in much stronger than expected, stoking speculation rates would stay higher for longer.
This is a theme reinforced by the IMF, who published a report, while data form the UK and New Zealand also reconfirmed the stickier story.
The risks to markets and households are rising.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest decision from the New Zealand Monetary Policy Committee was released on Wednesday, which was to leave the cash rate at 5.5%. Their key messages were little changed since the February MPS, showing little hurry to change current restrictive settings despite overall CPI inflation expected to fall below 3% this calendar year.
Upside short-term risks to the inflation outlook were largely downplayed, with the RBNZ expecting sub 3% inflation later this year. Despite the economic outlook evolving broadly as expected and inflation on a cooling trend, the RBNZ chose to defer any decisions on when to pivot to an easing bias until more clarity emerges.
Higher for longer…. again!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Kiwis Faced With Higher For Longer Rates Stuck At 5.5%!
The latest decision from the New Zealand Monetary Policy Committee was released on Wednesday, which was to leave the cash rate at 5.5%. Their key messages were little changed since the February MPS, showing little hurry to change current restrictive settings despite overall CPI inflation expected to fall below 3% this calendar year.
Upside short-term risks to the inflation outlook were largely downplayed, with the RBNZ expecting sub 3% inflation later this year. Despite the economic outlook evolving broadly as expected and inflation on a cooling trend, the RBNZ chose to defer any decisions on when to pivot to an easing bias until more clarity emerges.
Higher for longer…. again!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
On Wednesday Statistics New Zealand released consumer price index (CPI) data for the December quarter. The data showed that New Zealand inflation slowed in the final three months of 2023, despite indicators of domestic price pressures remained stubbornly strong, which came in below the Reserve Bank’s expectations. As a result, it appears that policymakers are likely to hold until there’s a clearer picture of the economy.
“While this is the smallest annual rise in the CPI in over two years, it remains above the Reserve Bank of New Zealand’s target range of 1 to 3 percent,” consumers prices senior manager Nicola Growden said.
The OCR currently stands at 5.5%. While Investors are betting the RBNZ will start cutting the Official Cash Rate in the second quarter and will lower the benchmark to 4.75% by year’s end. But as I discussed recently, policymakers remained concerned about sticky core prices and most economists expect the RBNZ will delay a rate cut until the second half of 2024. In November, the central bank projected that inflation would drop below 3% in the third quarter of this year.
“Inflation continues to move in the right direction,” said Jarrod Kerr, chief economist at Kiwibank in Auckland. “The current state of play and the outlook should be sufficient to see the RBNZ pivot away from rate hikes. Rate cuts are not too far away.”
However, others remain more sanguine. “The divergence between the domestic and imported components of inflation helps to illustrate the big concerns that the RBNZ is trying to balance,”said Satish Ranchhod, senior economist at Westpac Banking Corp.
“Inflation is coming down. That will be important for stabilizing inflation expectations and means that the RBNZ will feel more comfortable keeping the OCR on hold for now.”
Westpac believes the CPI print will keep the Reserve Bank of New Zealand on hold through 2024 because inflation is “still uncomfortably high”.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Kiwi Inflation Eases, But Slowly, So Rates Will Remain Higher For Longer!
