90 seconds at 9 am: Surprise fall in US GDP; surprise rise in EU confidence; surprise election announcement in Australia; NZ$1 = US$0.831 TWI - 74.7

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that there was a surprise fall in US GDP at the end of 2012. Their economy unexpectedly came to a standstill in the fourth quarter as the biggest plunge in defense spending in 40 years swamped gains for consumers and businesses. There were weaker exports and very low growth in inventories too.

Economists said the Q4 decline was 'temporary' and does not undermine the recovery track. The US makes three GDP announcements; this is the 'advance' one which gets progessively revised as more data comes to hand.

However, there may be an even bigger bump in the road in Q1 2013. Automatic budget cuts now seem more likely as political stances harden.

In Europe, another surprise; economic confidence rose more than economists forecast in January, adding to signs that the 17-nation currency bloc may be emerging from its recession. There is still more negative sentiment than positive, but the rise was welcomed.

The US Federal Reserve has left its arrangements unchanged. Since it began a third round of asset purchases in September aimed at lowering interest rates and spurring growth, bond yields have climbed. The trend may signal the program is working.

In Australia, Prime Minister Gillard has surprised observers by naming an election date far in advance - September 14 - counting on gains from a very long election campaign. The latest poll shows the Liberal Party has a small lead over Labor.

The OCR announcement by the Reserve Bank is at 9am and we will have full coverage from Wellington by Bernard Hickey. It's not that anyone expects a rate change today, but the tone of the announcement will give some important clues to markets.

The New Zealand dollar starts today quite a bit lower at 83.1 USc, 79.8 AUc, with the TWI down to 74.7. 

 

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13 Comments

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there was asurprise fall in US GDP at the end of 2012. 
 
It was only a surprise to the people who follow the MSM.

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"Environmentalist Gareth Morgan has offered to donate $5 to the SPCA for every homeless cat they put down."herald
Remind me....what happened when some idiot authority started paying for every rat tail handed in....!

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Could be a good little earner for the SPCA , to re-brand themselves as a pet abbatoir ..... and to sell the meat off-shore ....
 
...... win / win , Wolly ..... export earnings and cleaning up the environment ......
 
Now , who do we know who likes to eat pussy ...... hmmmmmmmmm ?

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GBH - this ones is going to look really good on SPCA rescue. Instead of the teary eyed rescuers, there'll be smily faced rescuers hopping fences....going to their partners.........there's another cat......grab it.....that's another $5 bucks.

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I've heard that the Greens want to raise the minimum wage in New Zealand to 3 cats per hour !
 
...... hmmmm , on 40 hours , that'd be a 120 cat week ..... I

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The thing is, if you look at the actual scientific measurement, cats kill some native birds, but kill a lot more predators and competitors of native birds (in particular controlling rats etc). In effect, cats are nett helpful.
http://www.tandfonline.com/doi/abs/10.1080/03014220709510087
So if you are putting a bounty on cats to save the native birds, then you will need to put a bounty on the things that have had the cat pressure taken off them, otherwise you'll have succeeded in spending a bunch of money to make the problem worse.

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But thats Exactly wot Gumnuts are For, shurely?

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...... if we " incentivised " people to farm native birds , there'd be no risk of extinction ......
 
And the farmers themselves would take care of the introduced predators .....

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How many Tui's would I have to squeeze per litre....

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I think to prove your "nett helpful" argument - a further study would be needed which documents the number of native birds killed by rats per annum in a catless suburban setting.  My understanding was that rats don't so much kill live native birds, but rather feast on their eggs - and as a dead bird can't mate again, the 'robbed' bird can.  But it is an interesting consideration.
 
 

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Wolly - It is called the Cobra effect - just hope someone brings this to the attention of Gareth.  Seems he has a limitation or two in his understanding mechanisms. 

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Re US GDP - no surprise whatsoever to MoM.
 
And her comment in a preceding post is useful to recall here, given the known 'pliability' of such figures....
 
"The takeaway from advance GDP, which will probably be revised higher, is that Q3 wasn't really +3% and Q4 wasn't really negative. Shall we say an "election-related" effect is observed. "
 
First rule of financial reporting:  'first trust yer data'

 

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a swedish firm has been given the ok to purchase HARTS farms.
Will we have the same gnawing of teeth as we did with the crafar farms.
I don't think so