- Central Bank worried about currency getting too strong (as euro weakens and investors seek higher returns).
- So have made (by announcement) policy interest rates more negative (i.e. depositors need to PAY to have their money in banks) hence making krona less attractive for foreign investors.
- Central bank also expanding its bond buying program (QE), i.e. aggressively buying krona-denominated bonds from the market (this results in a flood of krona into the market, hence if anyone wants to own krona, there are plenty available - this is an effective form of currency intervention, but without the Central Bank actually having to be active in the FX market).
- Low oil prices making life easier, so pushing up demand, and weak euro helping exporters.
- ECB's quantitative easing going well and boosting optimism.
- As a huge importer of commodities, when China's growth slows, global commodity prices head lower.
- Results in difficulties for commodity exporting economies (mainly emerging markets).
- Also resulting in increased divergence between US economy and rest of world (US is growing fast and not so reliant on demand from China).
- Currently fastest growing eurozone economy.
- Happening due to booming exports and strong inbound foreign direct investment (different from 2005 boom, which was characterised by domestically-driven demand and consumption).
- Ireland's bailout has ended, and hence so has austerity - public spending set to rise, which is also good for growth.
- Both commodity exporters and as China slows, it imports less.
- But NZ relies on exports of soft commodities, like dairy, whilst Australia relies on exports of hard commodities, like iron ore.
- China's slowdown in part due to property boom ending, so demand for iron ore has collapsed, while demand for dairy holding firm.
- Over-reliance on housing market to drive demand (i.e. dependent on wealth-effect of rising house prices).
- Too little reliance on investment and exports to drive demand.
- Poor productivity growth.
- Growth forecasts being revised upwards (expected to double Germany's growth rate this year) - property market up.
- External drivers: Low euro (helps exports) and weak oil (Spain is an energy importer).
- Internal drivers: Successful labour market reforms have made Spanish companies more competitive.
- Estimated 2m protesters took to the streets this weekend (1m in São Paulo alone).
- Anger at Rousseff's involvement in Petrobras corruption scandal.
- Widespread discontent at parlous state of the economy & prospect of austerity.
- Only came into existence in late 1990s after privatisation of housing that was previously assigned to the population by government or state controlled entities.
- Resulted in frenetic building of new homes over the course of the last decade.
- Led to large oversupply and current property downturn.
- NZ$ nearing parity with AU$.
- NZ$ strong off solid economy, big immigration ,stable + solid politics.
- AU$ weaker off weak economy (Australia highly exposed to slowdown in China demand for commodities) & political wobblies.