Here's our summary of key economic events over the weekend that affect New Zealand, with news of an export setback in China that may signal a tougher path for them in the rest of 2024.
But first, this week will kick off the US earnings season which will run for a few weeks until the Q1-2024 results are all in. Bank profits will be early in this set, many key ones coming this week. The Americans will also release retail sales results, and some housing updates.
Retail sales updates will also come from China, along with their Q1-2024 GDP outcome, tomorrow. It is "impressive" they can report that, well before any other major economy. Eyes will be on their foreign direct investment data too, along with housing market activity results for March.
Australia will release its labour market data this week, and CPI inflation data will some from Japan, Canada, and of course New Zealand (on Wednesday).
Over the weekend, China reported its new bank lending levels and they picked up in March from February but the results still disappointed. March is usually a strong month for borrowing because banks tend to extend more credit at the end of each quarter to meet lending targets. But the ¥3.1 tln in new March lending was less than the ¥3.6 tln expected and the ¥3.9 tln in March 2023.
Meanwhile, China's exports tumbled in March. They dropped -7.5% from a year ago, reversing sharply from a +5.6% growth in the earlier month. This was very much worse than market forecasts, highlighting the Middle Kingdom's uneven recovery and perhaps suggesting global demand won't drive growth there. It may also be a sign that de-risking from China because of its terrible recent signals to investors are biting harder and earlier than anticipated.
It is not all difficult news in China. A survey shows that for the first time since the end of 2021, wage growth rates there are picking up again.
India's industrial production rose by +5.7% in February from a year ago, the latest data released over the weekend, but that missed analyst forecasts of +6% growth; however it was a faster expansion than in each of the prior three months. A year ago this expansion was running at 5.8%, so little change on that comparison.
It is only about 200 days until the November US presidential election and nervousness about that outcome is starting to show up in sentiment surveys. Consumers are apprehensive that the golden run could be crashed by the vote, or that things could destabilise ahead of it. The University of Michigan consumer sentiment poll is now reflecting some of that apprehension. However it is only off a 33 month high so we shouldn't make too much of this April dip and it remains more than +20% higher than year-ago levels. Still, the shift was noticed by financial markets. Wall Street dipped in their Friday session, bond yields slipped slightly, and the USD surged against all-comers on the risk-off mood.
The UST 10yr yield is now at 4.52% and unchanged from Saturday's close. A week ago this rate was 4.39%. The key 2-10 yield curve inversion is unchanged at -38 bps. And their 1-5 curve inversion is also unchanged at -59 bps. As is their 3 mth-10yr curve inversion is now at -87 bps and a little less. The Australian 10 year bond yield is now at 4.26% and up +2 bps. The China 10 year bond rate is holding down at 2.29%. The NZ Government 10 year bond rate is now at 4.95% and unchanged from Saturday. A week ago it was at 4.70% so a large +25 bps rise since then.
The price of gold will start today lower by -US$6 from this time Saturday at US$2343/oz. We should note that this price hit its all-time high of US$2432 at about 4am Saturday morning. But it has been sharply down after that.
Despite extreme Middle East tensions, oil prices have been surprisingly stable over the weekend and still just on US$85/bbl in the US while the international Brent price is -50 USc lower at US$89.50/bbl. Both levels are about -US$2 less than a week ago. Interestingly, the head of the IEA strongly criticised European energy policy for "two monumental mistakes" - relying on Russian energy, and shifting away from nuclear power.
The Kiwi dollar starts today at just over 59.3 USc and down -10 bps from Saturday. Against the Aussie we are unchanged at 91.9 AUc. Against the euro we are little-changed as well at 55.8 euro cents. That all means our TWI-5 starts today just on 69.2 and similar to Saturday and this time last week.
The bitcoin price starts today sharply lower at US$63,785 and down -5.6% from this time Saturday. At one point it got as low as US$60,908. Volatility over the past 24 hours has been extreme at just on +/- 5.2%.
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123 Comments
Presenter Matt Gibb welcomes Paul and Adrienne Reeves to their own holiday home in Otematata, which they owned for 30 years. It was presented as a potential property for them to buy.
https://www.stuff.co.nz/home-property/350235828/viewers-complaint-over-…
Out of the mouths of real estate babes. Nothing to see here, move along.......
And speaking of media bias,NZME's Newstalk ZBoomer's constant property market spruiking by Mr Hosk et al becomes clearer when you read this;
https://www.nzherald.co.nz/business/nzme-annual-shareholders-meeting-nz…
excerpts;
NZME is forecasting earnings growth in 2024, supercharged by the performance of property portal OneRoof – a standout result in light of massive cutbacks in the wider New Zealand media industry.
NZME – the owner of the NZ Herald, Newstalk ZB, a suite of entertainment radio brands and OneRoof
“With more agents and vendors than ever before seeing the value of OneRoof’s offering and with a continued focus on increasing listings upgrades, we are capitalising on OneRoof’s potential to deliver significant growth.”
According to independent research commissioned by NZME, the company now reaches nine out of every 10 Kiwis each month.
I think the point is that The Herald is less likely to report unfavourable Real Estate news or news that upsets the Real Estate sector (e.g. the massive house prices crashes) because they rely on the sectors revenue. The Herald cannot report impartially on housing.
I watched a Netflix series last night about a kid who tried to get Pepsi to give him the Harrier Jet they had offered in a competition. He was supposed to go on Letterman but they pulled him last minute because Pepsi was a major advertiser on the network and the story risked painting Pepsi in a bad light.
I also note Driven is a major NHHerald supplement. Could there be a link between the anti-safety pro-car reporting and the fact they rely on car industry advertising $$$?
Most people have no idea that one roof operates in their interest and the interests of their advertisers. Maybe most understand that in this forum but I think it's still worth having vent here about it, and there will be new people coming here all the time who can be enlightened.
Also in India... be careful where you buy your cheap T shirts from...
https://www.reuters.com/business/energy/india-increase-coal-fired-capac…
I must admit I'm a little dubious about their claim to be have a low emissions per capita. Although I've never been there, the videos I see of their cities tends to indicate they are highly polluted, with essentially unbreathable atmosphere. How accurate are those measures?
Dan Simmons, in his book Phases Of Gravity (1989), reckons the pall of smoke over Indian cities is caused by the poor cooking their breakfasts over wood fires every morning. Don't know if that is still true or ever was, but I bet it's not counted in their carbon emissions.
I have travelled widely in India..wonderful country and people - my point is do some basic research before commenting perhaps? Inconvenient no..
India's per capita carbon emissions stand at approximately 2.29 tons, a figure significantly lower than the global average of 6.3 tons. He attributed this achievement to the simple lifestyle adopted by the Indian populace
I've been there. Some observations:
- CNG is fairly widely used, which has lower emissions than petrol or diesel (although petrol and diesel have different emissions from one another)
- smaller vehicles like rickshaws are become commonly powered by batteries
- car ownership is much lower than most Western countries, so more people are using public transport.
The sky is definitely pretty thick in the cities, but as others have suggested, much of that is from burning things other than fossil fuels.
simple lifestyle adopted by the Indian populace
This implies active choice. Most of their lower emissions are tied to the fact they're just a lot poorer.
Although I would say they're a lot more ecologically minded than some East Asians.
There is not an exact correlation between CO2 emissions and smoggy particulate emissions. I haven't been to India either, but travelling in low income countries in SE Asia there is lots of pollution in the cities (mostly due to open air cooking with wood or charcoal, and rubbish fires) but I bet their per capita emissions are dramatically below ours. Few electrical appliances, small scooters rather than big cars, mostly eating local food, small houses etc.
But all those open air cooking fires are burning fossil and other fuels which produce CO2 ? To have those levels of pollution that's a lot of fires.
Thinking of India you see a lot of small vehicles, most appear to be diesel billowing clouds of black smoke. Less in the other Asian cities but they're still there.
PDK is that an accurate statement? If you consider wood a renewable energy source, why not fossil fuels? the only real difference is the period of time they take to capture the carbon. Burning wood must release carbon just as burning fossil fuels does. Trees just capture it in a shorter period, but leave the trees there in sufficient quantity and then what happens to them? Eventually they too become fossil fuels.
Conventional language suggests fossil fuels are not renewable, but that is not strictly true is it?
We can sustainably harvest wood over human timescales, net zero emissions over a few decades perhaps. Fossil fuels may take millions of years to form - not renewable on a human timescale.
You'd have to take a very long term view to consider fossil fuels renewable. This timeline would be completely irrelevant to the question of climate change over human timescales.
Like I said, mostly wood or charcoal which are (or at least can be) renewable resources. No or little net CO2 emissions, but a whole load of particulates. We are more likely to use gas, which we pump out of the ground and all emissions are "new".
Another good example - we can afford newer cars with fewer particulate emissions, those cars you are talking about may emit a little more CO2 (I guess CO2 emissions must be proportional to the fuel use?) but the particulate emissions and visible pollution may be dramatically higher.
Just consider that the typical westerner will create 4 tonnes of CO2 output each year just by burning fuel in their vehicle. That's just what comes out of the exhaust - not in the vehicle production, etc.
Not many Indians are driving to the shops for their bottle of milk. You'd have to burn a lot to get to 4 tonnes without the help of a car.
For reference that is out of 14 tonnes of CO2 in total per capita for a typical westerner (and that figure includes domestic industry).
Yes, you can see the pollution in India, but pollution ≠ CO2 only. They have a horrendous particulate problem, it has to be said.
The Modi led government is pretty corrupt. All my Indian friends are complaining about them being even more corrupt, by a long way, than previous governments where graft was more the nature of the game. They tell me to be extremely dubious of statistical claims made from Modi sycophants both inside and outside government. More so as they are coming up to an election that ends in June. Chances of Modi being replaced? Near zero if reports of rigging are correct.
Government efforts started 30 years too late. I raised a kid there with two working parents. There's a reason most families have 0-2 kids and virtually none have 3 or more.
Youtubers now move to Japan to make content about getting a house for virtually free in the middle of nowhere.
I have copyright on that word... :)
But you aren't quite correct; BOTH echelons are overconsuming, on a long-term basis. One by being too numerous, the other by consuming too much per head. Neither are properly sustainable.
But all side of this discussion here, are light years ahead of Nicola Willis; her recent attempts to articulate sustainability....
Well, I'll just drop 'sustainability' out of that last line....
"Assuming the continuation of the current trajectory of our fertility and mortality (and even with some variation), the exponential population growth of the mid-20th century (doubling time of 37 years) is about to flip to an asymptotic decline, with the population halving every about 40 years."
https://insightplus.mja.com.au/wp-content/uploads/2024/02/Picture4-1.png
Whats interesting is back to the 60's about 90% of woman had children (in USA). Now it is 86%. So not a huge drop. Yet the USA birth rate has declined from 3.5 in the 60's to 1.66 today. The reason is the collapse of larger families. The Brady Bunch sized families that maybe 20% of woman use to have are basically extinct. Even having 3 kids which use to be the norm is now considered a large family, So the idea that modern woman in their 20's and 30's are just no longer interested in kids just isn't reflective of reality. What they do want is a work/life balance which entails a smaller family.
"The government is asking Waka Kotahi (NZ Transport Agency) to investigate a Long Tunnel option for Stage Highway 1 in Wellington.
The twin two-lane 4km tunnels would run from north of the Terrace to Wellington Road near the suburb of Kilbirnie"
https://www.rnz.co.nz/news/political/514270/government-investigates-4km…
Seems like a move to mostly benefit themselves on the drive to and from the airport. Would probably be cheaper to move parliament if they're that desperate.
I can't imagine the cost to benefit ratio will be good at all, and those in the South Island aren't going to be particularly supportive of more infrastructure spend up north when the lions share of funding is already being spent on projects in the North Island.
When I lived in the Windy City the main traffic from Wellington was Beehive - Airport return full off taxis (mostly single passenger) rushing off to get the cheques signed off for the next big thing. Never saw any on the electric bus service (which is fantastic by the way $5)
Airport to the terrace. Rows of taxis, each with a single civil servant.
I have been there, not a very civil servant, but it was paid by them.
Solution
Ban them/us from taxis. Put on free civil servant buses. Possibly need one every five minutes from the airport at morning rush hour.
Each bus eliminates about 300 - 500 meters of taxi queue thru the tunnel. Vastly cheaper also.
Hey Simeon,
I can save you 4 billion dollars and still get you these benefits:
"The option would also see better urban amenity through greater reallocation of surface level road space to active modes and public transport in the CBD and greater opportunities for housing intensification"
Instead of building the tunnels just spend half the money on:
"better urban amenity through greater reallocation of surface level road space to active modes and public transport in the CBD and greater opportunities for housing intensification"
For people who are not familiar with working out the costs and benefits of transport projects I'll explain why Simeon has mentioned this when he is ideologically opposed to active modes, public transport and housing intensification. It's because the project would fail every cost benefit analysis by many many margins. By adding these things into the project benefits and squeezing the assumptions you might just manage to get it positive or not as bad as it otherwise would be.
Of course as we've seen with the recent government GPS there is no way they would fund the space reallocation of road space for public transport and active modes projects. So it's just a ploy to make the project seem a little better than if they came out and said for every $1 dollar we spend on it we'll lose $8.
It may also be a sign that de-risking from China because of its terrible recent signals to investors are biting harder and earlier than anticipated.
“It would be a gross misunderstanding to think that it was the intention of this government [to want to reduce trade with China]. We want to further expand trade with China, taking into account the need for de-risking and diversification,” said a German government official. Link
A US vassal can’t expect to get a welcome like a real statesman Scholz arrived in China today to meet with Xi Jinping The visit of German Chancellor Olaf Scholz will last three days. At this time, the country's leaders will talk about Sino-German relations and "issues of common interest." A business delegation consisting of heads of a number of international corporations, such as Siemens, BMW and Mercedes-Benz, also arrived. - Ostashko reports Link
https://consciousnessofsheep.co.uk/2024/04/13/neoliberalisms-cleverest-…
'A large part of our built environment was constructed at the height of the oil age when energy was relatively cheap and resources plentiful. However, and in part because of this, much of that environment – especially our critical infrastructure – is reaching the age when it must either be replaced or undergo ever more expensive patching up. In the exuberant and optimistic post-war decades, for example, planners simply assumed that clever people in the future would be able to replace concrete structures which were known to have 40, 50, or 60-year lifespans. But cleverness in that sense is also a product of abundant energy, and far from knowing how to easily replace our crumbling buildings, we haven’t even figured out how to recognise the internal spoiling before the structure begins to disintegrate.'
Oil consumption, production and proven reserves are at record levels. Our forefathers had a lot more labour and didn't have to support a massive welfare state. There were only 5,000 unemployed in NZ in 1976.
"In 1949 there were about eight people of working age (25–64 years) for every person over the age of 65 years. ...globally there are now about five adults per old person because so many of us live on into old age. By 2100, when the children born in the first third of this century are elderly, this ratio is expected to have dropped to about 2."
https://insightplus.mja.com.au/2024/8/health-care-in-for-a-roller-coast…
Except that what was not considered was the vested interest of those who controlled resources to ensure their wealth, power and influence would not be threatened. there has long been stories of the oil industry actively suppressing the development of alternative technologies to fossil fuels. Not 100% successful of course, but sufficient to significantly delay progress. One can never know how true the stories were or are, but the likelihood of there being some truth in them would be high. So smart people finding clever ways to replace ageing infrastructure were likely just bought off, or denied the funding they needed to develop the alternatives.
FA - disagree fully, plus which you conflate,.
Resources and energy are indeed the physical limiting factors.
Technology is NOT energy; merely the application of energy to resources. Technology - like productivity - is completely bound to live within the Second Law of Thermodynamics. Meaning both plateau, following a diminishing-returns trajectory.
Sadi Carnot got there, a few years back...
Notice that Pocahontas Warren was trying to take the credit for the student loan relief, even though it didn't really have anything to do with her.
Such a dreadful leader and person on so many levels.
ZH sums it up:
What better way to distract voters about the failures of this administration and the inflation storm crushing the working poor than to distract with socialist policies of 'free stuff' - such as canceling student loan debt...
The quote reads like yet another example of "socialism" being when the money helps the younger or poorer, as opposed to the older or richer (as during Trump's time, continued under Biden). It's incredible that the US gave trillions to companies over COVID times, yet when discussing investment in educating a workforce that's horrid "socialism".
We have very much the same problem here, obviously. Handouts are fine to the wealthy and old, just fine, but they're horrid "socialism" if they go to the younger or poorer. Little regard for what's actually good investment for society either.
The quote reads like yet another example of "socialism" being when the money helps the younger or poorer, as opposed to the older or richer (as during Trump's time, continued under Biden)
Understand what you're saying. But it's hard not to be cynical like ZH. The Anglosphere seems to want to crush the young and the poor, while preserving the power in and handing out the cream to the ruling elite in particular - Pelosi and her mates with insider trading; Robbo and the endless stream of grifters with their post-political golden parachutes are some examples.
Whatever it is, it's not "socialism". It's more like a jury-rig with most of the spoils going to the Game of Mates. Think of cronyism and centralism.
B-b-b-but these wealthy and old people paid a lot of taxes therefore this makes them entitled to receive such welfare. Because it's not welfare for the upper class, but a loyalty scheme/rebates.
Imagine crowing about how much taxes you've paid because you've managed to keep your fellow man's/children's wage bill so low, that your ever growing share of productivity gains incurs a linearly growing amount of tax to be paid.
Indeed: FIRE industries run riot.
Biden's Sticky Inflation: Auto Insurance Rates Record Biggest Annual Jump Since 1976
The financial world we have known since WW2, is indeed coming to an end.
That is part of the reason the elite are in-fighting.
Whether rampant inflation causes a collapse, or whether war(s) intervene, we are receding now; putting back up trade barriers, on-shoring the making of stuff, this era is looking somewhat like Europe about 1935/7 - everyone knowing something dark is coming, and trying to set themselves up before it does...
Interesting take on the current world situation - I'm not so pessimistic. While the world faces various challenges and individual country's have their unique problems - be it immigration , demographic issues, perceived threats (real or imagined) etc none are insurmountable if there is a will (which I accept may be lacking....). I also accept that no amount of talking is going to make much difference with such entrenched views on the the loony left and rabid right. Am I naïve - maybe but I can't believe people are that hell bent on total world destruction.
everyone knowing something dark is coming, and trying to set themselves up before it does...
I'd agree that this is the case in the west. Outlook elsewhere is likely to be more positive (but still with an eye on the storm). All indications are that much of the world can see a future where they are not under the thumb of the US. BRICS is picking up a lot of steam with each geopolitical failure of the west.
Here are some:
- Ignoring Russian concerns regarding NATO and Ukraine and going ahead with a coup in 2014 motivating Russia to focus on remilitarisation (which they have done much more successfully than thought possible). This has lead to the west finding itself on the losing side of a major war for the first time in a long time.
- Giving unconditional support to Israel (widely considered to be a colonial apartheid ethno-state) to the point that it is now committing what has been referred to as 'plausible genocide'. This has lost a huge amount of credibility for the west in the past 6 months (mostly amongst their own and other populations, but also other governments). This now looks likely to extend to unconditional support for a wider regional war.
- Engaging in a trade war with China, whilst also failing to effectively compete with China's development efforts in other states.
- Failing to see that taken together, each of the above encourage Russia, China, and Iran to strengthen ties as we move from a unipolar to multipolar world. These ties happen to include 2 of the most important members of BRICS - a group that the west is excluded from and one which is proving very popular with third parties that happen to include governments that represent the vast majority of people on the planet.
Related to this, have you ever wondered why India's economy has been doing so well just recently? It's because they are increasingly engaging economically with the non-western large powers (and that opportunity was boosted massively by western trade sanctions against Russia and China).
These are just assertions and suffer from bullshit asymmetry - the amount of energy needed to refute bullshit is an order of magnitude bigger than that needed to produce it.
Firstly the Russian "concerns regarding NATO and Ukraine" are Russian talking points (calling the Maidan Revolution a coup is a dead giveaway). The rest of your statement is pure Russian propaganda ( or is that fantasy). Ukraine is slowly attritting the Russian army, navy (Black Sea Fleet) and air force every day. Various open source groups have documented the loses of the Russian military. Your statement makes me suspect strongly you are scared Russian if facing defeat.
Secondly - one man's terrorist is another man's freedom fighter. Neither side in the Hamas - Israel war are saints. But to tar Israel is to ignore the wider geopolitical and historical background to the on going tensions in the Middle East. While you are entitled to your opinion your statement shows a very strong prejudice. I like to keep an open mind.
China - development efforts in other states - you mean the Belt and Road Imitative which has concerns about debt-trap diplomacy and economic imperialism. The debate is on going with that one.
Much of what is happening today is the result of reality catching up with hype. China has been touted as going to overtake the US by when ( hint the date keeps shifting) - perhaps China will never overtake the US economically. In some respects this is an outdated argument / concept - but it is being played out at various levels in the world today - us versus them. Just watch the infighting in the Republican Party in the US. Another example is the increasing authoritarianism of Russia or China (or North Korea). To me each is a symptom of the respective system failing.
My further comment is watch this space.
"... did nobody notice all the rockets flying over Israel the other day ?"
Saw lots of sensationalist report of "hundreds" of rockets. But not much damage reported.
Israel has one of the best aerial defense systems in the world by a large margin and in both strength and depth.
So yeah. Waiting to see the damage reports and how well the billions of $$$ 'Mericans paid for it worked. ;-)
by Zwifter | 17th Oct 23, 9:13am
No its not you guys don't get it. Gaza needs to be smashed. Just love how the Arabs around the world yell in protest but Egypt shut the boarder crossing because nobody wants them. I don't see a "Dunkirk" moment on the beaches with ships arriving to take a single one of them away. They are a bunch of trouble makers.
Is this still your position on this?
Yep and its happening just like I knew it would. The Israelis are sick and tired of taking shit and they learned the hard way so they made sure it would never happen again. Iran is going to get nuked if they are not careful, the second the Israeli intelligence comes back that Iran finally has a bomb they are toast.
I can understand Israelis frustration, but at the same time surely they have to acknowledge that eliminating Gaza's population might end up causing them more problems than it solves down the line. The cycle of violence and hate is what made this conflict into a multi-generation disaster that has no clear end in sight.
It's a shame we no longer have Mahuta as Foreign Minister to give them a good old dressing down like she did in China.
Could still send her over. I wonder if she still has the white skate shoes and Khaki military jacket. Might need to send her back to Dress for Success to pick out a new outfit.
Ecotard dilemma
"...We assess 16 applications where plastics are used across five key sectors: packaging, building and construction, automotive, textiles, and consumer durables. These sectors account for about 90% of the global plastic volume. Our results show that in 15 of the 16 applications a plastic product incurs fewer GHG emissions than their alternatives. In these applications, plastic products release 10% to 90% fewer emissions across the product life cycle."
Replacing Plastics with Alternatives Is Worse for Greenhouse Gas Emissions in Most Cases
Standard Profile spin.
Nobody is moaning about the correlation between plastics and CO2.
What they ARE concerned about, is the impact discarded plastic has in/on the biosphere. We are starting to eat food which is contaminated with residual plastic - and I. for one, would like the chance to not do so.
I guess you only need a short bed?
Nobody. Yeah, nah.
"plastics co2 emissions"
24,600,000 results
https://www.google.com/search?client=firefox-b-d&q=plastics+co2+emissio…
Gold is the new ATM according to Bloomie
At a Brooklyn Pawnshop, Customers Are Flooding In to Sell Gold
“People are using gold as an ATM they never had,” said Gene Furman, owner of King Gold & Pawn and Empire Gold Buyers. At Furman’s 5th Avenue store, the number of people coming in selling and pawning gold jewelry is more than three times above normal levels since prices started to rally in late February.
Among them is Branden Sabino, a 30-year-old IT specialist, who sold a gold necklace and a gold ring last week.
“Prices are high, and I need cash,” he said, adding that with the cost of rent, groceries and car insurance rising, he doesn’t have any savings.
https://www.bloomberg.com/news/articles/2024-04-14/gold-prices-at-a-rec…
“Prices are high, and I need cash,” he said, adding that with the cost of rent, groceries and car insurance rising, he doesn’t have any savings.
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