Here's my summary of the key news overnight in 90 seconds at 9 am, including news of improving economic prospects in both the US and China.
But first, the IMF has cut their forecast for US economic growth to +1.7% for 2014 saying the drag from the first quarter contraction will not be offset. However, it is very bullish on the rest of 2014 and 2015, seeing growth over 3% in these periods. That would be the best levels in more than a decade. They also want the US to spend more on social programs.
Most of China’s provinces said their economies accelerated in the second quarter, suggesting local leaders are sharpening their focus on growth, and that is despite new rules that evaluate them on their ability to meet debt control debt and pollution goals. The regions are benefiting from central-government stimulus including expedited railway spending and tax cuts while they have out their own plans to support growth.
China’s gold demand fell almost 20% in the first six months of this year as investors bought fewer bars and coins, offsetting increased demand for jewelry, the China Gold Association said. Demand for gold bars was down more than 60%.
In Australia, there is signs the banks there are starting a mortgage war as their housing volumes tread water. CBA, NAB and Westpac have slashed mortgage rates in a fight for market share and offering a new focus on fixed rates which tempt borrowers with interest rates at less than 5% for five years.
In the US the earnings season is in full swing and the results are beating analyst expectations. Major improvements by Boeing, Pepsi, Facebook and Apple all helped propel the S&P500 higher into record territory, although not quite beating the 2000 index level.
UST 10yr yields fell to 2.46% in late trade this morning. The oil price rose on both benchmarks and now at US$103/$108; gold is unchanged.
We start today with the NZ dollar basically unchanged from where we left it at the end of business yesterday. We are now just over 86.8 USc, at 91.9 AUc. The TWI is at 80.8.
We will have the RBNZ's latest OCR decision in a few minutes, with full coverage from Bernard Hickey.
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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3 Comments
Very poor homework regarding gold down in China , China now imports gold directly into beijing and not all gold is via Hong Kong. The figures shown above reflect the information of flow of gold through Hong Kong. It is assumed that the reasoning for this is to continue to protect the actual amount of gold from being reported. It is also assumed that china Gold is equivalent to 2% of their GDP making them a second only to the USA assuming that the USA are truthfull about how much gold they own , ask the Germans for their thoughts on this one.
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