Here's my summary of the key news today in 90 seconds at 9 am, including news of the latest dairy auction.
But first, following on from yesterday's positive global factory data, overnight US service industries expanded much faster than expected in the latest ISM survey. This shows that the biggest part of the American economy held up well during the federal government shut down.
US home ownership rates rose slightly in the September quarter after a long decline. At 65.3% they are now back to where they were in the mid 1990s, and well off their 2004 peak of above 69%. (In 2006 New Zealand had a home ownership rate of 70% but we will need to wait for our latest census data to get an update of our current rate.)
Benchmark UST 10yr yields climbed to 2.66% overnight; gold fell to US$1,306/oz, and US oil fell to just over US$93/barrel; the Brent benchmark was down as well. The main US equities indexes started off much lower when they opened, but are now back to 'even' in late trade.
Late yesterday, the RBA held its official interest rate at a record low 2.5% and said its currency "is still uncomfortably high. A lower level ... is likely to be needed to achieve balanced growth in [their] economy." Markets didn't oblige however. The Aussie is unchanged after the Statement.
The continuing rise in Aussie bank profits is making analysts worried. It is claimed that the reductions in bad loan provisioning is now at unsustainable levels, and the gains from these cutbacks are ending. In fact, the situation may reverse. Something to watch.
In the overnight Fonterra auction, which saw the highest volumes offered and sold since September, prices were down another 1.8% in US dollars on the previous auction, and down 1% in NZ dollars. They have now fallen 10.6% from their recent peak in April in US dollars, and are down 7.2% from their recent NZ dollar peak in August. Compared with this time last year, they are up 41% in both currencies.
The NZ dollar starts today at 83.0 USc, 87.4 AUc, and the TWI was at 77.1.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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28 Comments
the median asking (US) rent has once again risen in Q3, this time by just $1 from $735 to $736 per month.
Er, how come their rents are so much less than ours?
http://www.zerohedge.com/news/2013-11-05/us-rents-rise-new-all-time-hig…
... you can fill in your Miss Posts with a joke , if you like .... we don't mind ...
I came downstairs this morning , and found the wife laying face down on the kitchen floor .... stone cold dead .... I had a panic attack ... until I remembered that McDonalds serves breakfast til 11 a.m. ....
Luxury , GBH...I can only dream of finding my wife in prone silence, (you have stairs ?) why it was only at breakfast I said to her when she dies I'm having her headstone engraved "here lies my cold dead wife", to which she replied, Yeah, well yours will say , "Here lies my dead Husband, Stiff at last "
... the wife was shrieking blue murder as she threw my suitcases at me ... " get out of my life forever , you no good drunkard womanising lazy S.O.B ... " ... and as a parting shot she added ... " I want you to suffer a long lingering painful death ! "
" Huh " , I said " so now you want me back ? " ...
In the overnight Fonterra auction, which saw the highest volumes offered and sold since September
David, I wouldn't get too excited about the volume sold. The volume at this auction is down 9% from the same auction a year ago. That with now a couple of extra suppliers (but the first drop in the number of qualified bidders I can recall (888 to 820).
Fonterra's Contract 2 Regular WMP (the auction's main product) was down 6%. Amul's Contract 2 Regular WMP was up 5%.
Can't you just see the Fed on the phone to the RBA /RBNZ.......hold..hold...hold...just a little longer now... hold...hold...closing out soon...hold...hold...almost there..hold now, keep your nerve....hold...Jackson Hole not that far away...hold..and hold
Is this known as a holding pattern....? The Markets don't get skittish during holding patterns, nor do they care for the jawboning.
.. not to be outdone , GeoOp ( NZX : GEO ) has rocketed 18 % this morning , to $ 3.48 / share ... valuing the company at $ 95 million ...
Fair make yer head spin to think how much these companies will be worth someday in the distant future when they stop burning cash and actually make a profit !
Check this out: "A New Zealand broking firm has put a target price of $45.70 on Xero and says the company could grow to a $10 billion NASDAQ company within five years."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=111…
You forgot Alan Hawkin's Equiticorp, Bruce Judge's Judge Corpn, Olly Newland's Landmark Corpn
Endless summer days of blue skies
http://www.youtube.com/watch?v=WSCplj40uuY
Willie Nelson's Blue Skies
A couple of charts about the Bakken oil fields. It seems the wells are not running dry as fast as some people feared and unemployment is 3% and wages in six figures:
http://d1w116sruyx1mf.cloudfront.net/ee-assets/channels/cdd_default/131…
http://d1w116sruyx1mf.cloudfront.net/ee-assets/channels/cdd_default/131…
Interesting commentator - that could have been GBH regurgitating that kind of spin. The first graph avoids the depletion-rates.
"Fracked wells age very fast. The initial production is very high so is the rate of depletion. The point is, a newly fracked well may produce 1,000 barrels a day, but this falls by sixty percent the next year, thirty five by the third and fifteen percent by the fourth. Oil companies should replace forty to forty five percent of the current production each year to maintain/increase production".
The second graph appears to be void of actual numbers - the oldest trick in the book. But - until natural capital is properly valued, even filling in the numbers would mean little.
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