Here's my summary of the key news overnight in 90 seconds at 9 am, including news of some more realistic talk from Chinese policy makers.
But first, this morning the minutes of the June Fed meeting were released. Some FOMC committee members were concerned investors may be growing too complacent about the economic outlook and the central bank should be on the lookout for excessive risk-taking. These comments saw the US dollar weaken.
They confirmed bond buying will end on schedule in October. They also began detailing how they plan to ease the American economy out of an era of loose monetary policy, and seemed near agreement on a three-pronged strategy to manage interest rates in the future.
In China, inflation cooled somewhat in June and is now at 2.3%. But authorities there are finding it increasingly difficult to grow and free-up at the same time. Overnight they admitted they are in no position to pull back from their long-standing currency peg policies.
They also said that their government's 7.5% economic growth target isn't a "floor," suggesting that Beijing may be accepting that slower growth is their future.
On Wall Street, stocks are rallying again, gaining back a lot of the recent sell-off.
Yields on benchmark UST 10 yr bonds rose today and are now at 2.57%. The oil price fell yet again with the US price threatening US$102/barrel, Brent $108/barrel. The experts continue to be confounded by surging US energy production. Gold was slightly higher overnight, now at US$1,325/oz.
Oh, and by the way, we also start today with the NZ dollar in record territory again. We are at 88.1 USc (the post-float record high is 88.4 USc), at 93.7 AUc. The TWI is at 81.9 extending the run of daily all-time highs.
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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17 Comments
Personally I think its a great reason to dump GST as well. I mean its crazy that I can import gear (even that that isnt available here or is a special one off cost, read huge markup) cheaper and faster than I can get it in NZ. Even paying postage its still cheaper (often even allowing 15% for GST) than it is here, that is crazy and in-efficient.
Let alone the fact that GST is a regressive tax.
regards
Steven, if a product is under $400 then I almost solely shop in AU/overseas.
For example I needed a new Rubber bush kit for my 4wd (these are the exact same item)
NZD$ $299.99 + $6.00 shipping from 4wdbits.co.nz
Or
AUD$ $49.99 + $10 Shipping from Ebay.com.au = around $75.00 off my credit card and arrived in under 48 hours.
We get shafted here
Yep.
Agree, also if I get stuff from say Amazon it takes 3~5 days. If I get stuff shiped via say (oh god) fistways it can take 7 days, and be damaged and see fistways take no responsibility (oh your receptionist damaged it) using what FFS? a 28lb sledge?
That is plain crazy.
Where do you order the 4wd bits from btw?
regards
Ebay.com.au is great for the smaller stuff - look for the seller "onlineautoparts" you can go to their website - just google it - and confirm prices as sometimes they are cheaper on their site or vice versa. They are seriously fast shipping as well.
dtcarter - they are a great set of stoppers - I upgraded my Spec Camber 29er to a set of those over my Avids along with the ICE disks - a worthy upgrade seeing as I sold the old ones for $85 on Tardme - cost me bugger all.
New brakes for my bike. 170 + 10 shipping to buy from a discount retailer in nz, with $80 off 'special', back to 249 in a couple weeks.
https://www.torpedo7.co.nz/products/SHBDDNN78/title/shimano-deore-xt-di…-
Or $110 from the UK with free express shipping. That's almost half cost to source it from the other side of the world
http://www.wiggle.co.uk/shimano-xt-m785-disc-brake-lever-and-pm-caliper/
And don't get me started on how much utilities in this country cost...
You are paying spot price for the currency exchange and since the dollar has shot up since the local supplier bought and warehoused them it is likely to be a savings. also you won't be paying duty as small consumer, but the professional importer must do so.
With express deliver the world is becoming smaller and there is less reason to carry local inventory - especially with dollar favouring imports.
Using downstream couriers I can order from online Auckland suppliers at 2:30pm and have things arrive 9:00am nect morning to my rural address. Likewise I can get books from the UK in 3 - 5 days, and if I pay extra from the US in same.
Upstream (from rual to auckland) can take a week.
there is little reason for local Just-in-times to be holding more than shelf stock, and what they think they'll need to service daily cash'n'carry. Just as CBD improved on High St, the new model will need to be embraced. That's one reason I find Government wasting taxpayer money making state of the ark centers in CBD christchurch and Banks constructing similar palaces to be a bit anchronistic - As a person in business where cost matters, I'd be looking at how much front line was needed and just using that. All the back-end services would be somewhere much cheaper. There are places within 30minutes of Chch Airport which are a fraction of the build cost. Likewise why build business IN Wgtn? Fibre and access can be connected in Parapara or Levin, the wage bill is way cheaper, the skills are there, the build cost much lower. Airport access isn't too far. or are taxpayers and bank customers paying for ego.
The same holds true for wiggle, the pound has shot up lately with the economic recovery, wiggle likely paid more for them when they bought and warehoused them. So you can't use that to explain our higher costs, GBP to NZD rate has held pretty steady over the last year. http://www.xe.com/currencycharts/?from=GBP&to=NZD&view=1Y
There is no duty to pay (used to be 5% on bikes - did Avanti stop local manufacturing?)
GST is the only difference. I don't know why customs don't automate the collection of it and then lower the threshold to $5 GST. Having to pay $60 handling for the freight company to take a credit card payment is crazy! Imagine if the coffee shop charged you a $60 GST collection fee on top of your $4 flat white.
Nonetheless, last time i did a major service i was quite happy to pay GST and the collection charge on top. I still saved $400 purchasing my parts from wiggle, plus a far greater range to choose from.
Piece on who earns interest. The (secondary) interesting comment is,
"These are the people who have a lot to lose if inflation erodes the values of their assets, and a lot to gain if inflation comes in below expectations or there is actual deflation."
So, really we are looking at a significant % of ppl with a vested interest to keep inflation low (especially if they are hiding in US bonds and earning diddly interest) and even to cause a depression as,
a) their money is worth more
AND
b) the opportunities from firesales resulting from a Depression and companies goign out of business would give them huge returns.
http://krugman.blogs.nytimes.com/2014/07/09/more-on-class-and-monetary-…
Got to wonder sometimes just how loopy the world has become.
regards
One thing on NZ's vapourish recovery if you chart NZ's electricity consumption from mar1990 to mar2014 (I used 1990, 2000, then 2003-13 as a comparison)
http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/…
It has essentially been flat or declining from 2004 (ish). Until maybe Mar 14 shows a possible up trend in consumption. (Not corrected for weather btw).
For me that suggests consumers are probably still stressed, so putting up the kwh is politically messy...
I also wonder if the SOE's are worried about a left Govn, got a phone call offering to fix my "variable" rate for 3years at an oh so only marginal amount more than I pay now, what a deal!!!!
uh no......hopefully the Left Govn will blow them away....and if home solar gets teh go-ahead...oh boy, Queensland is a great example of negative pricing happening during the day, ugly for shareholders of SOEs, eh boatman.
regards
PS Interesting how it looks like the world crude oil production graph....
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