Here's our summary of key economic events overnight that affect New Zealand with news risk sentiment in financial markets seems to be improving.
But in Europe, the horrors of Russian 'war crimes' are hardening attitudes. Lithuania has declared it won't buy any Russian gas or oil. Other European countries are distancing themselves further from economic contact with Russia. Berlin has taken control of Gazprom’s German business in a move they say was necessary to secure continuity of supply in Germany and Europe. As a consequence the world's oil markets are very unsettled.
Only Hungary is turning a blind eye to what is happening.
Meanwhile, American factory orders fell -0.5% in February from January, in line with what was expected. What wasn't expected was an upward revision for January however. The February decline was largely due to fewer orders for "transportation equipment" which means fewer orders for aircraft. Excluding that, factory orders actually rose +0.4% in a month, and are up almost +13% from February 2021.
Also rising strongly were Canadian building permits in February which were up more than +26% from a year ago and a record high for any February month, up +21% from January.
The Bank of Canada Business Outlook Survey shows that businesses there continue to expect strong sales growth but at a more moderate pace than over the past year. Growth is coming as restrictions related to the pandemic ease. But they also expect continuing high inflation. This Q1-2022 was the second most positive survey ever since the quarterly series began in 2003. This might be a trigger for an aggressive rate hike there.
In China, more than half of China's leading lenders reduced their exposure to the real estate sector last year, in a trend likely to exacerbate the cash squeeze for troubled developers. But oddly, the price of copper, which is largely tied to Chinese property development activity, is hovering near record highs again.
The pandemic fight in China is getting ugly. The lockdowns in places like Shanghai are causing real difficulties keeping food supplied to large urban areas.
Singapore's PMI slipped marginally in March and is now barely expanding, and it is now at a level that is the lowest since August 2020.
In India, business conditions improved in March, but the latest results showed the gloss is going off with slower expansions in factory orders and production as well as a further decline in new export orders. At the same time, there are mounting price pressures. These inflation concerns weighted on business confidence, which fell to its lowest level in two years.
In Australia, an upward revision to February job ad levels which were maintained in March points to further solid employment gains and upward pressure on wages growth. March was the first time ever they posted more than 250,000 job ads.
And the housing market in Australia is in a new surge, not only for house prices, but rental vacancy rates fell to a record low of just 1% nationwide in March, as rental supply dwindled and demand ramps up following the return of international students.
We should note that the price of tin is rising again, as well as zinc, which is almost at a new record high.
Meanwhile, the IPCC is having trouble wrapping up its latest report with difficulty agreeing on the future of fossil fuels and the role of carbon-removal technologies in efforts to fight warming temperatures. The New Zealand representative on this panel is a social scientist, Judy Lawrence. It is not all 'bad news' - the report when it is released is expected to show they now think staying below a +2o warming is both achievable and affordable even if +1.5o is no longer attainable.
The UST 10yr yield opens today at 2.42% and up +3 bps from this time yesterday. The UST 2-10 rate curve starts today inverted by -4 bps and less than yesterday and conviction levels are not high. Their 1-5 curve is however flatter at +84 bps. Their 30 day-10yr curve is marginally steeper at +223 bps. The Australian ten year bond is back down -6 bps at 2.85%. The China Govt ten year bond is unchanged at 2.82%. And the New Zealand Govt ten year is up +2 bps at just on 3.32%.
On Wall Street, the S&P500 is up +0.6% in early Monday afternoon trade. Overnight, European markets rose a similar level although London only rose +0.3%. Yesterday, Tokyo was up +0.3%. Hong Kong rose +2.1%. Shanghai was closed for a holiday and will be closed again today. The ASX200 ended its Monday session up +.03% and yje NZX50 Capital Index fell -0.3% largely on Air New Zealand weakness.
The price of gold starts today at US$1930/oz and up +US$4/oz from this time yesterday.
And oil prices are up +US$3 to just under US$102/bbl in the US. And the international Brent price is now just on US$107/bbl.
The Kiwi dollar will open firmer than at this time yesterday at 69.6 USc. Against the Australian dollar we are essentially unchanged at 92.3 AUc. Against the euro we are also very much firmer at 63.4 euro cents and a +¾c gain. That all means our TWI-5 starts today at just under 74.9 which is actually a new four month high.
The bitcoin price is down -2.3% since this time yesterday to US$45,327. Volatility over the past 24 hours has been moderate at +/- 2.4%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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But in Europe, the horrors of Russian 'war crimes' are hardening attitudes. Lithuania has declared it won't buy any Russian gas or oil. Other European countries are distancing themselves further from economic contact with Russia.
Any yet acts of US expediency and hypocrisy persist with silent Western consent :
You could add: Larry C. Johnson
That reads like a fairy tail...
I do wonder how this guy would explain the Russian military trucks that were destroyed by Ukraine. Pictures show they were carrying washing machines and flat screen tv's, while retreating back to Russia.
Or how about the video from the Russian border town, of Russian soldiers turning up with backpacks at the post office and sending looted possessions back to their homes?
Audaxes,
According to the Wall Street Journal, the import of Russian oil has now been banned. I don't yet know for sure if this story is fake, but if the US were to keep importing it, it is hard to see how they could keep it secret.
I will now make my own enquiries.
https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/08… with immediate effect.
This is just CCP propaganda against the US. Pure undiluted BS.
The volume of Russian oil imports by the United States has increased by 43% from March 19 to 25 compared to the previous week, according to a new report by the US Energy Information Administration (EIA). Data showed the US imported up to 100,000 barrels of Russian crude per day.
Washington has eased sanctions on Russian agricultural products, including fertilizers, placed on Moscow over the crisis in Ukraine. The move aims to protect US farmers from a shortage of chemical products as food prices in the country continue to soar.
The Office of Foreign Assets Control (OFAC) of the US Treasury recently published a new general license dated March 24, which effectively removed restrictions on the import of Russian fertilizers.
US Weekly Preliminary Crude Imports: https://www.eia.gov/dnav/pet/pet_move_wimpc_s1_w.htm
US mortgage delinquencies are rising. In Feb, national delinquency rate rose for first time in 9 months. Properties 30 days or more past due or in foreclosure is 1.95m nationwide. US foreclosure starts 25k, up 540% yoy. Something to keep an eye on going forward. Link
141m houses, so just over 1% in delinquency that sounds normal to me, foreclosure at 25k is the more interesting figure and does show signs of financial stress but given the size of the market is not economically significant.
https://www.statista.com/statistics/240267/number-of-housing-units-in-the-united-states/
And oil prices are up +US$3 to just under US$102/bbl in the US. And the international Brent price is now just on US$107/bbl.
War means politics with dead people. It's wrong.
But don't fall for being only on one side and talking "war crimes". Remember Mosul. Remember Raqqa. Remember Gaza. (maybe those are not a problem being on 'our' side)
Biden talks this morning about bringing Russians to trial but the USA refuses to be subject to that court. Work that out.
https://en.m.wikipedia.org/wiki/United_States_and_the_International_Cri…
Some countries write the rules, other countries follow them. Russia has forgotten its place in the global order.
Anyway nothing will come of an ICC showtrial as long as President Putin et. al. remain within Russia. Given the Russian militaries modus operandi war crimes where expected, although I thought they'd try to hide the evidence better.
Some countries write the rules, other countries follow them. Russia has forgotten its place in the global order.
But those same countries writing said rules today are suddenly unable to enforce them. Hence the order is being rearranged.
Francois Mitterrand, the longest serving president of France (1981-1985), not long before he died (1996), he made this quite extraordinary statement:
“France does not know it, but she is at war with America. A permanent, vital, economic war, and only apparently a victimless war.
Yes, the Americans are inexorable, they are voracious, they want undivided power over the world… It is an unknown war, a permanent war, a war without apparent deaths and yet a war to the death.”
Such sentiments from a modern French president seem extraordinary – after all, France was and still is a historic American ally. Link
Audaxes,
This is getting tiresome. I think that a high proportion of those here would have some knowledge of American failings in other countries, up to and including war crimes. Why else would they refuse to be part of the ICC?
But that is not the issue here. The issue is simply what Russia is doing in the Ukraine and to all appearances, members of its armed forces are committing acts which are likely to be considered as war crimes. Just come out and say that this is wrong, instead of hiding behind accusations of American wrongdoings. Then you would have some credibility.
Through my entire working life and beyond I am so sick and tired of those that continually justify their favoured side of matters by pointing to worse behaviour by the side that they do not favour. On that basis anything above hell is paradise and any motor car is absolutely great if it’s not a Trabant. It is difficult to imagine a more counterproductive attitude. Such people, need to simply ask themselves do they enjoy eating an apple because it is less rotten than another.
It has been said before, but we mostly know just how bad the US leadership is, and many of us would be surprised but a little pleased if George W was held to account for the harm that he caused when he invaded Iraq, but when all is said and done you cannot justify murder because someone else did it too.
If there is a major call for Russia, specifically Putin and his sycophants to face an international court and be held accountable, then that may actually strengthen the case for some American leaders to be held to account, and perhaps Israeli, not to mention a few others?
I don't see whataboutism as raising a different issue. I see it as showing a bigger picture in how countries, cultures, people act. Quite often people will snap shot a country, culture, race etc and go away and think "oh only that country, race do those bad things" resulting in divisiveness between groups. A example of this is Slavery and conquest. If you were to watch current TV you would think only Europeans were the only ones in the slave trade or European's were the only ones to conquest other nations. Same with the subject of tribal warfare, canablism in NZ, you would think only ancient Maori did this but in history many cultures had this practice at one time or another. When we use, hold on a second what about other nations or races did that, it can show no race or culture is perfect. Let's see this problem as action's (destructive or constructive to people), not as a race or group of people being the problem. Make the leaders or instigators be the focus. This applies to Russia right now, it's the leaders not the people that are responsible. Average Joe doesn't have much say and it's very easy to say why don't they stop it but in reality most people don't want to be in harms way.
The question that may be asked can be very leading. As in your people and country suck because they did xyz. Current issue's need to find a way to be resolved but now the current line of questioning seems to be a way of moral grandstanding not real solutions.
True, but selective KH. The Biden Administration has removed the sanctions on ICC members imposed by Trump. And he is reviewing the overall policy with an eye to signing up. The problem is more to do with Republican opposition in Congress who want to block it. Maybe the US is slow, but they will eventually signup. Maybe this latest European disaster will tip the scales.
Not according to the Israelis.
As regards crimes which impacted them, of course.
As for the crimes they commit daily - that other 6 million? - no, no, they're not human.
Funny how we devalue 'others'.
None of us want to know the truth - that we live at the expense of others. The US (and we attendant satellites) have done very well via repression; we're hardly going to vote for self-examination. That's why the recent and fierce NZ wokeness; we're trying to self-justify by 'righting' one local, recent 'othering'. That's all about fooling ourselves so we can carry on......
"It is not all 'bad news' - the report when it is released is expected to show they now think staying below a +2o warming is both achievable and affordable even if +1.5o is no longer attainable."
David Chaston - have you any idea what a 2 degree average rise really means? Not bad news? Let me translate:
The Titanic is sinking, but you won't be going to the bottom with it; you will float.
Unsaid; Until you freeze.
And: Affordable? They are advocating renewables (which is fine by me), but this is the first reversal of energy-grade that humanity has had to face en masse. Hithertofore, all our moves have been upgrades. Even then, all we've done with the opportunities has been to use them up as fast as possible, while laying bets that tomorrow will be even bigger.
Maybe some reporter could ask Judy Lawrence about this oh-so-minor divergence?
Maybe someone could clearly articulate the actual cost in dollars that the average wage earner will face as a result of mitigation, without falling back on pathos about your the price children's future or other such nonsense that you can't use to pay for a roof over your head.
Maybe - but what are those?
Keystroke-issued debt, backed by back-cast forward projections? Those keystrokes which have outnumbered GDP (whatever that is) by over 3:1 since 2008.
You want to 'value' stuff in them, still? Sounds like a vested-interest in the past, to me. Im talking about valuing the materials which constitute that roof, not the proxy. Good luck sheltering under a digital dollar.
I want the "value" because I pay for the goods and services I need to stay alive with money. Whether environmentalists like it not, that's the thing that most people use to feed, clothe and shelter their families.
I guess if you consider not starving to death or dying from exposure, then yea, I guess it is a 'vested interest' approach, but I can't feed and shelter my family with snark either, so here we are.
We have to tackle mitigation though, if we have family we're looking after. Not much choice about that. In the short term, yes, we do it by earning digital tokens and buying stuff, but in the medium to long term, if we do nothing beyond that we'll not be looking after them. So...manage the short term but start planning in earnest for the long term?
What use is being looked after as a child only to find oneself completely unprepared as an adult, through the fault of others?
The UST 10yr yield opens today at 2.42% and up +3 bps from this time yesterday. The UST 2-10 rate curve starts today inverted by -4 bps and less than yesterday and conviction levels are not high.
Those following the money from last year's curve levels to those that persist today have cleaned up. Markets are about profits and losses not convictions.
...S&P500 is up +0.6% in early Monday afternoon trade.
This is the time I love most in the market cycle, when the market completely ignores reality.
It is not all 'bad news' - the report when it is released is expected to show they now think staying below a +2o warming is both achievable and affordable even if +1.5o is no longer attainable
I admire your optimism David! The report basically says that we are screwed... but we can still do stuff to be less screwed. For NZ, the report makes tough reading - it basically says that:
- meat and dairy production needs to be massively scaled back across the world - with major reductions in consumption in richer countries
- the world needs to focus on methane in the short-term as this will buy us time to reduce carbon emissions
- monoculture forests, which NZ relies on heavily for offsets, are not the answer (more kill than cure)
- existing fossil fuel extracting and refining infrastructure will on its own lead to us overshooting 2 degrees heating if we let it run its course; hence, we need to not only stop building it and we need to close some plant early (further Taranaki oil field exploration?!?)
- wealthy countries (and wealthier people within countries) consume far more than their fair share of the remaining carbon budget, and have contributed far more to the problem. They need to take a bigger hit
This is the classic deflection response of 'individualism'. The IPCC report was peer reviewed and agreed by thousands of scientists and academics. The report concludes with very high confidence that individual actions alone will fall woefully short of what is required - individual actions often have to be enabled by Govt actions. Think seatbelt wearing, plastic bag bans etc but on a huge scale.
https://www.carbonbrief.org/guest-post-how-discourses-of-delay-are-used…
Nonsense Jfoe - we all going to be better off - not "screwed". Calm the farm bro, you are scaring the children.
"One thing he wants to make very clear is that all the paths, even the hottest ones, show improvements in human well-being on average. IPCC scientists expect that average life expectancy will continue to rise, that poverty and hunger rates will continue to decline, and that average incomes will go up in every single plausible future, simply because they always have. “There isn’t, you know, like a Mad Max scenario among the SSPs,” O’Neill said. Climate change will ruin individual lives and kill individual people, and it may even drag down rates of improvement in human well-being, but on average, he said, “we’re generally in the climate-change field not talking about futures that are worse than today.
Brian O’Neill, the director of the Joint Global Change Research Institute, a partnership between the U.S. Department of Energy and the University of Maryland at College Park, has a clearer view of this question than most of us. He was one of the lead architects of the five different futures—called “shared socioeconomic pathways,” or SSPs.”
https://www.theatlantic.com/science/archive/2021/11/how-bad-will-climat…
Yes, Brian's description of the future sounds great: "Highly unequal investments in human capital, combined with increasing disparities in economic opportunity and political power, lead to increasing inequalities and stratification both across and within countries. Over time, a gap widens between an internationally-connected society that contributes to knowledge- and capital-intensive sectors of the global economy, and a fragmented collection of lower-income, poorly educated societies that work in a labor intensive, low-tech economy. Social cohesion degrades and conflict and unrest become increasingly common."
Quite duplicitous of you Jfoe. You pull a quote from another paper referring to SSP4, in specific reference to inequality, when Brian clearly states in my The Atlantic link "The path we seem to be on, at least for now, looks closer to SSP 2, which the authors call “Middle of the Road.” This is a world in which “social, economic, and technological trends do not shift markedly from historical patterns.” A world, in other words, in which we do not heroically rise to the occasion to fix things, but in which we also don’t get much worse than we already are."
If the the best you can find is a quote about inequality to justify we are all "screwed" perhaps you should do some more reading. Inequality is with us long before, and after, the trendy climate change narrative peters out.
Here is the link for your quote. You're welcome.
https://www.sciencedirect.com/science/article/abs/pii/S0959378015000060
SSP4 is far more likely that SSP2 at the moment - open a newspaper! More importantly, all of the SSP scenarios assume that emissions will reduce as per Govt commitments. This is clearly and massively optimistic - and that is the obvious take out from the IPCC report.
SSP4 is far more likely that SSP2 at the moment - open a newspaper! More importantly, all of the SSP scenarios assume that emissions will reduce as per Govt commitments. This is clearly and massively optimistic - and that is the obvious take out from the IPCC report.
ah I see the problem - you base your doomsday scenarios from Stuff headlines.
Check out Brian (et al) GDP growth figures out to 2100. Not a lot of people screwed. But in fact very much wealthier. I note the only scenario when the gini index increases is your ssp4 pick.
https://ars.els-cdn.com/content/image/1-s2.0-S0959378016300681-gr2.jpg
https://www.rnz.co.nz/news/world/464641/climate-change-ipcc-scientists-….
Not quite such a rosy picture.
To be fair , 1.5 is already gone burger. Perhaps acknowledging 2 degrees is where it is now. but we should acknowledge its the end of millions ofpeoples homes and livilihoods.
The time for action is now , no goals, actions. And who cares which country does what, we only got one planet.
I suspect the people facing significant curtailment in living standards probably care who does what. No point in NZ bankrupting ourselves and making life miserable for all but the well-heeled if another country is going to increase their outputs by our annual total every month.
She's probably one of the better brains in the country - but she stays well clear of the energy-reduction, overpopulation issue. Whether that's through personal avoidance, or the straight-jacket that is the IPCC, is hard to tell.
The problem is energy - the only form we have in the quantities needed to do the mitigation, is the form that is doing the exhaust damage. We therefore need no 'an effort', but no effort. As one of my colleagues puts it: Don't just do something; sit there!
So much doom. I prefer to bail myself than wring my hands, will the boat do down? Perhaps but I can say I was trying to do something.
There are very much clear alternatives but the conversation must be direct with China, India, Brazil and the US. Until they stop increasing their leading emissions the rest of us can only put a suit on the corpse.
Only Hungary is turning a blind eye to what is happening.
As a Hungarian, I hate to see this result, even though it was expected. The government controls 90% of the media and has been using it to push their propaganda 24/7, for the past 12 years.
People who bitched about Jacinda's daily covid check-in during the pandemic would not believe their eyes if they saw just 30 minutes of any Hungarian state television. Just some recent examples:
The joint opposition (a coalition of six! parties) got exactly FIVE MINUTES on state TV to talk to the people - in the last 4 years! No interviews, no debates, just a 5 minute monologue after 4 years of complete censorship, with a ticking countdown in the background. (https://youtu.be/NyDUCLDlWz8?t=19 for the morbidly curious)
A few days before the elections, the state TV made an 'ad' with most of their presenters making a statement that they'll vote for Orbán. They kept running this ad right until the day of the elections. Again, this is state TV, paid for by the taxpayers!
For the last 12 years, govt propaganda billboards have been dominating the streetscapes. The messages are rarely subtle. Here is the latest example, with the faces of opposition leaders. https://www.nepszava.hu//i/12/6/0/1344524.jpg The message says: "They're dangerous! Let's stop them! Only Fidesz! (X)" Fidesz is Orban's party.
Orban's govt centralised the financing of electorates by making the local tax incomes go to the govt's pocket. They redistribute the money in a way that electorates with leaders from any of the opposing parties will only get scraps. Locals are pretty much forced to vote for Orban's men if they want their area to get any money.
Now imagine this happening in NZ... Just replace Orban with either Ardern or Luxon and be horrified. Orban built a Putin-like government and there's pretty much no way to get rid of them now.
Chinas crazy covid oppression and social credit score system is truly horrifying.
https://twitter.com/songpinganq/status/1509862761165357064?s=20&t=Plto3…
This is what they are trying to export to the rest of the world, especially with Central Bank Digital Currencies.
And the housing market in Australia is in a new surge, not only for house prices, but rental vacancy rates fell to a record low of just 1% nationwide in March, as rental supply dwindled and demand ramps up following the return of international students.
And the storm that damaged a lot of houses in NSW and Queensland, a good friend of mine will be in rental accommodation for up to a year while his house is repaired.
Could this happen in NZ?
https://edition.cnn.com/2022/04/04/asia/sri-lanka-crisis-ministers-resi…
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