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Hello, I’m David Chaston with Ninety at nine, brought to you by interest.co.nz. This
is where you get everything you need to know in 90 seconds at 9 o’clock, including news
about the rise in the importance of the Chinese currency even as its exchange rate falls.
The recent sharp decline in the value of the Chinese yuan is worrying its trading partners.
American officials and politicians along with some in other Asian nations think China is
intentionally keeping its currency below its true market value to give its exporters an
edge over competitors. When the words 'currency manipulation' start to be be used again by
its rivals - especially the US - we can expect to hear more about 'trade wars' again.
Maybe one reason China's rivals are worried is that its currency could quickly become
a key reserve currency.
In an astonishing conclusion in an ANZ report to be released today, ANZ is predicting the
liberalisation of China's financial system will unleash a flood of capital into global
bond and equity markets and Asia's financial system will be larger than the US and Europe
combined by 2030. It will be "a tectonic shift", they say.
Later today we get the closely watched flash PMI data for China for March.
At the end of last week, markets closed slightly down. Gold and oil rose marginally and benchmark
UST 10 year yields were up to 2.74%. Yellen's signal that the Fed is starting to think about
rate rises next year kicks off more bond prices reassessments. Bonds may be in for a hard
time.
Our swap rates took a breather on Friday, but their future direction now depends a lot
on the size of the 'rush to fix' mortgages ahead of the expected regular hikes in the
OCR.
Ahead this week, there is little on the data front, but Fonterra releases its interim results
on Wednesday and with it an update of the expected payout.
The NZ Dollar had an uneventful weekend and starts the week at 85.3 USc, at 94.0 AUc and
the TWI starts at 79.9.
I’m David Chaston, and that was 90 at nine, brought to you by interest.co.nz.