Here's my summary of the key news overnight in 90 seconds at 9 am, including news about deficits.
The US Treasury announced today that the US Federal government had a surplus in April of $107 billion bringing its shortfall for the 12 months to its lowest level since 2000, a deficit of $499 bln or about 3.3% of GDP. That deficit is expected to keep reducing to well under 3% of GDP by the end of 2014.
American stocks rose, with the Dow and the S&P 500 hitting record highs and technology stocks extending their bounce. European stocks rose to their highest level in more than six years, but it was not the story in Japan.
Japan posted its smallest current account surplus on record for the fiscal year that ended in March, as structural changes in the economy undermine government efforts to achieve growth through exports.
Late yesterday, Fonterra reported that its milk flows in New Zealand were up 7% in the South Island and 8.2% in the North Island. In the West Island (Australia) however they were 3 % lower than for the same 11 month period a year ago.
All eyes today will be on the Australian Federal budget which is anticipated to be a tough one. It will be reported at 9:30pm tonight.
The insider release of market sensitive statistics before an embargo has been lifted has seen an arrest of an Australian Bureau of Statistics staff member. Apparently his tipoff resulted in a A$7 million profit.
The gold and oil prices both rose slightly overnight. The benchmark UST 10yr yield is now at 2.65%.
On the exchange rate, we start today with the NZ dollar virtually unchanged overnight at 86.2 USc, unchanged against the Aussie at 92.1 AUc and the TWI is just on 80.1.
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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1 Comments
I know in New Zealand we think that housing is the economy and to a degree it is, and will be, until it isn't. But the reality is that energy underwrites everything we do and access to it is of paramount importance to most nations. Where you get it and how much you rely on it will shape the politics to come.
They are a reminder that Baku was perhaps the most important place in the Nazi-Soviet war. It produced almost all of the Soviet Union's petroleum. The Germans were desperate for it and wanted to deny it to Moscow. Germany's strategy after 1942, including the infamous battle of Stalingrad, turned on Baku's oil. In the end, the Germans threw an army against the high Caucasus guarding Baku. In response, an army raised in the Caucasus fought and defeated them. The Soviets won the war. They wouldn't have if the Germans had reached Baku.
Click to EnlargeBaku is strategic again today, partly because of oil.
Today, Azerbaijani energy production is massive, but it cannot substitute for Russia's production. Russian energy production, meanwhile, defines part of the strategic equation. Many European countries depend substantially on Russian energy, particularly natural gas. They have few alternatives.
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