Here's my summary of the key news overnight in 90 seconds at 9 am, including news of more monetary and fiscal juice in both Europe and China.
But first, industrial production in the eurozone slipped in May, according to data published overnight, reinforcing concern that a tentative economic recovery is already stalling. Factory output fell 1.1% in the 18 countries of the currency bloc, compared with April.
The decline in manufacturing was broad-based, including not only economically troubled countries like Portugal, but also Germany.
Tonight, the ECB boss is expected to announce the final details of a NZ$1 tln stimulus package. It will give banks the money in return for them expanding their lending to companies and households. More debt is apparently the answer for the euro-zone woes. It comes as part of the previously announced TLTRO program.
China is apparently embarking in a parallel stimulus program, one being actioned by local government. It comes as the central government is limiting aid for the national economy. Local government funding vehicles are the main tool being used to achieve growth targets which are seen as crucial for political advancement of Party officials.
And staying in China, major banks have halted an experimental program, sanctioned by the country's central bank, that helped citizens transfer large sums overseas despite government capital controls. The halt came after a damning local TV show and underscored the domestic political sensitivity of wealthy Chinese moving money abroad.
In Australia today, we expect to hear the initial results from the Murray Report on their banking system. You will remember David Murray; he was the CEO of the Commonwealth Bank before Ralph Norris took over. It is a fox-in-henhouse inquiry. The results will be subject to much sceptical analysis.
In New York, yields on benchmark UST 10 yr bonds rose slightly today and are currently at 2.54%. The weekend oil price drop has been holding at the lower levels at just on US$100 in the US and under US$107 for the Brent benchmark. The gold price has now followed them down falling from US$1,339/oz to US$1,306 today. That's an overnight fall of -2.5%.
And we start today with the NZ dollar just marginally lower this morning. We are just under 88.0 USc, at 93.7 AUc. The TWI is now a tad under 81.8.
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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5 Comments
Yes... more debt.... really cheap money ..I'm guessing....
Before they run out of road for the can to be kicked down..... we will probably witness the greatest asset boom of all time... I suppose we already are...
To bring it closer to home...... Hard to see NZ real estate do anything but go up ... over time....
Like diluting wine......... money is losing its purchasing power... its value
I call that Inflation... in a true monetary sense.
Better to leverage and buy property.
Even better, buy stocks with fewer reasons to interact with the base needs of humanity.
There will be much hand wringing and angst . I'll wager one of the unintended consequences of this stimulus will be more Chinese folk borrowing money against Hong Kong and Shanghai properties and using that cheap money to buy up Auckland properties for '' cash'' .
This will further crowd out Auckland based Kiwi first home buyers from the market , and there will be much hand wringing and angst , while we look for someone to blame .
We naive Kiwis will not understand this dynamic and blame everyone from John Key , to Len Brown , Graeme Wheeler , the Banks , Olie Newland , Barfoot and Thompson , property investors, speculators , builders suppliers , wealthy Asian migrants , wealthy North shore South African migrants , the National Party , the government , the housing minster , even Bernard Hickey might get some blame ( as the messenger) and anyone else that springs to mind when it bites us on the backside and Auckland houses reach stratospheric levels .
On the other hand
'And staying in China, major banks have halted an experimental program, sanctioned by the country's central bank, that helped citizens transfer large sums overseas despite government capital controls. The halt came after a damning local TV show and underscored the domestic political sensitivity of wealthy Chinese moving money abroad.'
there should be less cash floating this way into the Auckland housing market
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