また、NZは20年以上前に先進国の中でも異色といわれる教育改革を断行しており、この流れが今日の特色ある教育に繋がっていると思われます。1980年代後半、時のNZ政府は財政難を打開すべくありとあらゆる政府部門の解体･民営化を行い、「教育」にもメスを入れました。具体的には「教育委員会」を廃止し、学校経営のほとんどの権限を各学校に委譲、受け皿としてThe Board of Trustee(学校理事会)の設置を義務づけたのです。学校理事会は生徒の父母で構成されており日本のPTAと似ていますが、その実態は似て非なるものです。NZの公立校では校長先生が実務のトップ(マネージャー)、学校理事会(役員は父母で構成)が学校経営のガバナンスを行います。私は教育方面の専門家ではないためこれがどのくらい日本の常識から乖離しているかわからなかったのですが、NZのこの独立路線は世界的にも他に例がないらしく、日本の自治体や学校から見学や視察に訪れる教育関係者が少なくないそうです。
The events of the last month have consolidated our long held view that the global recovery is on course but only at a glacial pace. Central banks see little upside risk to growth forecasts and the inflation outlook in most economies is subdued at best, and generally stagnant if one excludes house price growth. As a case in point, the minutes of the Federal Reserve’s (“Fed”) 30 April meeting noted that there is continued slack in the US economy (especially the labour market) and as such there was little concern about inflationary pressures as an impediment to maintaining stimulus. The European Central Bank (“ECB”) appears to be on the cusp of finally taking more aggressive action to stimulate its economy. Long criticised for not enacting similar stimulatory measures to other economies, ECB President Mario Draghi has said that the Policy Committee is ready to take action at the 5 June meeting if it sees another low inflation reading (released 3 June). Is it too late though? Eurozone March quarter GDP was a pathetic 0.2% and would have been much worse had Germany not pulled it through with 0.8% growth. Worryingly, the May reading of the German IFO business climate index fell more than expected, with a more subdued assessment of current conditions and the future outlook. At a time when France and Italy, are struggling to produce growth (Italy in fact contracted in the March quarter), it becomes even more imperative that the German economy maintains momentum. Previously, the world has turned to China to provide economic invigoration however that is becoming less reliable as it looks to transform its economy and rein in excessive credit growth. The most recent PMI survey reported that manufacturing activity reached a five month high in May however industrial metal prices (notably iron ore and copper) remain under selling pressure, highlighting the huge inventory stockpiles and oversupply issues that need to be rebalanced. We remain unconvinced of a major turnaround in China’s fortunes and think that the overall trend is still a broader deceleration in the economy, weighed down by a deflating housing bubble. The housing sector accounts for up to 16.0% of broader economic activity and analysts are becoming worried that a sharp slowdown could pose systemic risk to an already cooling economy. The New Zealand economy still boasts far superior fundamentals than most of its counterparts however the inflationary pressures as highlighted by the Reserve Bank of New Zealand (“RBNZ”) are starting to ease, in no small part due to a prolonged high NZD, but also due to housing pressures softening. In addition, there appears to be downside risk to the upcoming dairy season’s payout. Is the “good news story” overpriced?
Currency Review
The much anticipated USD strengthening is now looking to be more gradual than initially expected. A more influential driver of currencies at the moment is investors’ hunt for yield, reignited by a depressed yield environment under further strain by weak inflation outlooks in the major economies. This has buttressed risky (and yield bearing) currencies such as the AUD and NZD, even as weakness in commodity markets (think China) lurks in the background. For Australia, the slowdown effect in China has been more abrupt, slamming hard commodity prices. In fact, some analysts think that the expected reduced capital inflows from the transition in the resource sector from construction to production will offset increased demand for AUD denominated bonds. This should limit major rallies in the AUD but we think the fundamentals of the Australian economy are still strong enough to keep the AUD/USD away from 0.9000 for now. Meanwhile New Zealand’s main commodity export – dairy – is also going through a weak patch. GlobalDairyTrade auction results have fallen for seven consecutive fortnights. Whilst there is an apparent disconnect between dairy prices and the NZD/USD due to other factors underpinning the currency such as the ‘hunt for yield’, it nevertheless reveals a chink in the heretofore invincible armour of the New Zealand economy. An emergence of further cracks, for example an escalating slowdown in the Chinese economy - China accounts of 20% of New Zealand exports - and/or a less aggressive Official Cash Rate hiking cycle by the RBNZ, might start to weigh on the NZD. To put that in context though, we are still the only advanced economy with a central bank pricing in interest rate hikes this year, and 50 basis points at that. From an investor’s point of view, there is still incentive (and fundamental rationale) to allocate funds to the New Zealand economy. As such, we remain confident that the fundamentals support the NZD in the short term (especially whilst there is weakness in most other economies).
Fixed Income – Bond Market Analysis
Falling bond yields reflect the non-inflationary outlook for most economies. In the US, the benchmark 10 year Treasury yield broke below the key 2.50% technical support level, getting as low as 2.40% last month. Inflation data for April showed the largest monthly increase in nearly a year however markets are not convinced that this is a trend, while the Fed has said it is not concerned about inflationary pressures as a result of its stimulus. Furthermore, in a subdued risk environment, US Treasuries continue to garner support from safe haven flows. It’s hard to see the US 10 year Treasury yield rising to test 2.80% anytime soon. European government bond yields have started to rise recently, however this is purely a reflection of increased risk premia – inflation is almost non-existent - on concerns that Eurozone elections (notably Greece) might derail some of the economic reforms, as well as profit taking by bond traders after a period of strong bond performance which arguably drove yields on the weaker economies excessively low. Bond yields could fall again though if the ECB takes decisive action at its 5 June meeting. The market is now becoming less bullish, and more in line with our own views, on the aggressive nature of the RBNZ’s hiking cycle as evidence feeds through of an easing of housing pressures (the main driver of domestic inflation). It’s not unreasonable that the RBNZ still gets to its 4.50% (+/- 0.50%) neutral 90 day rate although perhaps over a longer period, all else equal in the global economy. Further out along the yield curve, there continues to be bullish flattening pressures, as the ‘hunt for yield’ – a result of global investors still flush with cash – directs capital inflows toward Australasian investment products. The 2023 NZ Government Bond yield hit a 10 month low of 4.25% earlier in April on strong investor demand.
