Tony Alexander's View

- Two potential shocks to the generally good outlook for NZ's economy this year are underway at the moment. Neither has yet amounted to much but they are both worth keeping an eye on.

- The Reserve Bank uses a range of indicators to gauge whether an upturning housing market might be producing risky bank lending. At this stage no red lights are flashing, but the extent of the turnaround in Auckland's market seen in Barfoot and Thompson data this week might make for some interesting analyses mid-year.

- Climate change will increasingly influence what we do, and this year central banks are rolling out new stress tests for banks which will likely slowly lead to reduced credit available to both sectors at risk and sectors deeply enmeshed in higher emissions.

- Late last year fixed mortgage rates stopped falling and some rates rose in response to an improving world outlook. But war worries have contributed to reduced wholesale borrowing costs, and in conjunction with new economic worries across the Tasman, suggest 2020 will remain a highly favourable year for borrowers - meaning bad news for savers.

Tony Alexander

Economics Speaker