Here's my summary of the key news overnight in 90 seconds at 9 am, including news of new China stimulus.
But first, the US pre-cursor ADP payroll data series came in almost exactly where observers expected, with non-farm jobs growing 191,000 in March. This survey is remarkably similar to the key official Non-Farm Payrolls report, although there can be individual month discrepancies. The trends are highly correlated and show steady jobs gains, at about the same rate as the 2004-2006 period.
Also helping the data mood, the US Commerce Department reported that February factory orders rose 1.6%, above expectations and much better than the 1% decline in January.
The Chinese have pulled the trigger on a new round of stimulus to protect their sagging economy. Announced overnight, the package of measures includes railway spending and tax relief to support the economy and create jobs.
Germany has adopted a minimum wage for the first time ever - €8.50 or NZ$13.67 per hour. It starts in 2015 and won't apply to the first six months of work.
France has been warned by other EU nations about its ever-tardy pace of reform. "Time is running out," they say.
In Australia, the RBA wants Australia's biggest banks and building societies to pay a levy to help pay for a fund that will protect their own depositors in the event of a banking collapse. They set out their position at the Aussie Governments banking inquiry, chaired by the ex-CEO of CBA and someone known to oppose such impositions on banks. Its likely to be a move that will expose the capturing of their official inquiry by the banking industry.
Staying in Australia, their Treasury is making the case for raising their GST and cutting personal income tax, a sign some observers believe the new Government wants to prepare Australians for major changes to the taxation system. Australians’ standard of living is threatened by weak productivity growth, falling commodity prices and an ageing population, they said. Sounds eerily like New Zealand six years ago. The closer recent ties between the NZ and Australian Treasury departments is seeing ideas flow west, rather than the usual other way around.
Stocks are up in New York at new record levels, gold has risen to US$1,290/oz but oil is down under US$100/bbl in the US and the Brent price fell below US$104/bbl a quarterly low and back to where it was a year ago.
Meanwhile UST benchmark 10 year bond yields have risen to 2.80%.
The NZ Dollar starts today almost a full cent lower than Monday's peak, following the dairy price drop and is now at at 85.6 USc, the Aussie is at 92.6 AUc, and the TWI remains at 80.0.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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13 Comments
http://neweconomicperspectives.org/2014/04/deflation-dementia.html
Another piece, really it looks like the EU centre is hell bent on breaking the edges,
http://neweconomicperspectives.org/2014/04/dr-draghi-prescribes-dose-de…
Its a gob smackingly stupid and disconnected policy IMHO...
regards
http://abcnews.go.com/blogs/headlines/2014/04/earthquakes-in-chile-and-…
I think its' very meaningful that China seems to go to the brink and then the stimulus appears.
I'm guessing that EVERY Central Bank and Govt will do this....
Long term unintended consequences...????
Maybe the biggest asset boom weve seen in a long time...??? Av house price in Auck $1 million plus..????
Longer term ...maybe inflation pressures will force Central Banks to "back off" ...and the we get the Deflationary implosion, into the abyss, that Steven is waiting for...??
With asset price yields slowly moving lower.... maybe we are moving into the speculative phase of the "Minsky ponzi cycle"..??
No,
a) its a regressive tax, hammering the already hammerd poor more..
b) If you have limited income and its spent on essentials like food, well you buy less essentials, like food. That has a double whammy, directly on that household and since they buy les on that sector and jobs. So this is deflationary in nature.
c) Its not unfair to tax labour, that is a tax on profit. All profit should be taxed IMHO.
regards
Steven
Um, well, no, the EU at least seems hell bent on suicide and will take the world with it into tteh Greatest Depression ever.
http://neweconomicperspectives.org/2014/04/dr-draghi-prescribes-dose-de…
regards
If I understand correctly the author of that article staunchly advocates fiscal stimulus for Europe, but I wonder where does all of this leave New Zealand. Or what should we be doing? I just finished reading Jim Rickards' Currency war where Rickards makes the compelling case that the Ywan, Yen, USD, and Euro are competitively devaluing to gain export advantage, and repair their ailing economies. That narrative seems consistent with the NZD currency exchange rates. I heard someone on the radio a while ago say "people love a high NZD right up until they lose their jobs". It seems that we're in a scary position with high NZD, and an inflated housing market (in places). Banks seem to be taking rear guard action in the form of covered bonds and bail in provisions. What does one do? perhaps just buy a house and assume that everything will be okay?
Could this be something on the positive out of OZ:
After a competitive tender, Woolworths has awarded its private label milk contract in Victoria - previously held by Lion Dairy & Drinks - to Fonterra and given it a 10-year rather than a two-year contract.
Read more: http://www.smh.com.au/business/retail/woolworths-inks-milk-deal-with-nz-dairy-giant-fonterra-20140403-3600n.html#ixzz2xmlgRmNz
With the cash that's being spent on the 'stimulus' package, I think at least 90% of the mortgages in the US could be paid off. If you want to stimulate the economy, that would be a far better use of the cash and it would help the banks stay solvent. Or better yet, let people have more of their money to spend on what they want, and CUT GOVERNMENT SPENDING ALREADY!
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