New Zealand's Robertson: Prudent to run surpluses, pay down debt

Omkar Godbole FXStreet Contributor

The International Monetary Fund's (IMF) latest global economic forecasts highlight the importance of running budget surpluses and pay down debt, New Zealand's Finance Minister Robertson said on Wednesday.

Key quotes (scoop.co.nz)

The International Monetary Fund’s (IMF) latest global economic forecasts are a timely reminder of why the Coalition Government is running surpluses, sensibly managing debt and focussing on policies to support growth.

The global growth downgrade by the IMF is a reminder of why the Government is ensuring the books are in order and strong enough to protect the economy and New Zealanders from any rainy day such as changes in the international economy.

The IMF’s Fiscal Monitor used New Zealand as an example of good practice for fiscal management. The IMF expects the New Zealand Government’s financial position to remain better than peers, including Australia, Canada, the UK, the US, and the Euro area, while our debt will remain lower than these other advanced economies.

It’s important to remember that the Government accounts are for the year ended 30 June 2018, and the better-than-expected surplus is in part due to one-off factors. Calls for ongoing increases in spending need to keep in mind that there first needs to be confidence that the better-than-expected results will continue year after year, as opposed to just being a one-off.

Due to the IMF’s comments today on the rising risks to the global economy, it’s prudent that we wait until the Treasury releases its next set of forecasts in mid-December.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold moves away from one-week low, climbs above $4,450 as USD edges lower ahead of CPI

Gold builds on its modest intraday recovery from the $4,300 neighborhood, or a one-and-a-half-week low, touched earlier this Friday, and climbs above $4,350 heading into the European session. The upside potential, however, seems limited as traders opt to wait for the release of US consumer inflation figures before placing directional bets.

Cardano approaches critical support as correction risks grow

Cardano (ADA) recovers slightly, trading at $0.206 at the time of writing on Friday, inches above the critical support zone after losing more than 6% so far this week. Weakening derivatives data and fading bullish momentum suggest a bearish near-term outlook, with a decisive close below the support zone potentially triggering a deeper correction for ADA.

US core CPI data set to ease in August as markets reprice Fed September rate decision

The US Bureau of Labor Statistics will publish the August Consumer Price Index data on Friday. The report is expected to show a small decline in annual core inflation. Any divergence from analysts’ estimates could influence the Federal Reserve’s policy outlook and impact the US Dollar’s valuation.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.