Here's my summary of the key news overnight in 90 seconds at 9 am, including news all eyes have been on the release of the FOMC minutes of the July 30 meeting.
And these show that most Fed members are ready to taper this year, and September seems a likely bet. In fact there was only one dissenter in these minutes and she wanted a more direct signal that tapering would start soon. The rest voted to be more vague about when the roll-back would start.
Also interesting was their bullish view on growth for the US economy, and the expectation that jobs growth is is making 'solid gains'. Some members also wanted to downplay their two unemployment markers for future action.
The upbeat tone has been bullish for the US dollar in subsequent trading, but oil is down sharply and the Dow has lifted back above the 15,000 level. Gold got a small bounce too.
Sales of previously owned American homes jumped 6.5% in July from June to their second-highest level in more than six years. Buyers reportedly rushed to lock in mortgage rates before they increased any more.
And there has been a rebound in new orders which helped to lift US factory activity to a four-month high in July. Their PMI rose to 53.2 from 51.9 in June.
In Europe, Greek bailout talk intensified following statements out of Germany earlier in the week.
Fletcher Building may be upbeat about prospects in New Zealand, but it is the reverse in Australia. It is part of the the building products industry that is struggling there, despite falling mortgage rates.
The NZ dollar starts today lower again at 78.6 USc, 87.4 AUc, and the TWI is at 74.2, and on that basis the our currency is down 2.7% so far this week.
Keep an eye on our economic calendar for all the latest data releases.
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15 Comments
You are normally upbeat David, but this time I am not sure you are right. Not at 9.00 am this morning:
meanwhile in the UK
Almost two million retired adults in the UK have less disposable income than the average 11 year-old, as Britain's savings crisis creates a generation of "pension paupers".
Or, meanwhile the lackluster pensions industry who have failed miserably to perform would like more money to fail miserably with.
We have not even began to see how bad this is going to get IMHO. Wehn the income streams for the pensions funds collapse ie shares and property even the pocket moeny wont be there.....oh boy will that cause anguish...and mayhem at the ballot box.
regards
Not of the top of my head, Hmm let me think
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
—Ludwig Von Mises
Maybe David is working on a belief that reality doesn't matter provided you can manage perceptions?
Meanwhile, Karl Denninger appears to have read the FOMC minutes and has a different take to David:
Australia will be fine , their economy is way more flexible , diversified and robust than New Zealand's .
It can weather a storm .
The worst that may happen is some mines get mothballed , BHP and Rio Tinto shares lose some of their sparkle and Kiwi truck drivers on the mines earnig a AU $100, 000 per annum salary cheque get a reality check back here in the WINZ queue
Meaning in work is something I have talked about before and I suspect 90% of you have "bullshit jobs", exceptions mostly being the farmers that grace these pages.
Of course he misses the energy factor but it is still a great read.
A world without teachers or dock-workers would soon be in trouble, and even one without science fiction writers or ska musicians would clearly be a lesser place. It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish.
It is now looking more likely that the DOW will not hit 16k by the end September so will not crash. Rather it is melting and will do so down to the 12-13k mark over the next few weeks.
This is timed just right for the FED to start reverseing QE in September/October.
China's growing food production problems,
http://grist.org/food/6-mind-boggling-facts-about-farms-in-china/?utm_s…
"China considers its soil problems “state secrets.” The Chinese government conducted a national survey of soil pollution in 2006, but it has refused to release the results. But evidence is building that soil toxicity is a major problem that’s creeping into the food supply. In May 2013, food safety officials in the southern city of Guangzhou found heightened levels of cadmium, a carcinogenic heavy metal, in 8 of 18 rice samples picked up at local restaurants, sparking a national furor."
Hint, dont buy any chinese food....the chinese are not...
http://www.motherjones.com/tom-philpott/2013/07/why-china-wants-us-grow…
"China's "shift towards a greater reliance on food imports could have profound implications for global food markets because China's total demand for grains is vast relative to the size of globally traded markets."
Good for NZ, maybe....I guess.
regards
that would be throwing stones in glass houses. Yes we have a problem, its why sheeps liver is hard to buy in NZ. I also believe it is turning up in our chicken, coming from the grain.
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