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US job market changing; Iraq tension spike; Rare earth collapse; Low market volatility; UST 10yr 2.43%; NZ$1 = US$0.846, TWI = 79.3
Here's my summary of the key news overnight in 90 seconds at 9 am, including news of geo-political crisis but oddly stable financial markets.
But first, in the US there is a noticeable change in their jobs market being reported. The power is shifting from employers to employees with more regions facing skills shortages - and pay levels starting to rise.
But the big events are still geo-political. Just as the Ukraine crisis seems to be easing, the one in Iraq is coming to a head. The dominant Shia-bock that controls the Iraqi parliament has lost patience with the prime-ministership of Norui al-Maliki and nominated an alternative. Maliki has control of the Baghdad security forces. The next day or so will determine which direction Iraq now goes. The oil and investment markets are watching closely.
The Russian food sanctions look like they could have a distorting effect, especially on dairy prices. Aussie dairy farmers are hoping New Zealand actually does take up its opportunity to supply Russia thereby limiting the downward price pressure on them in other markets. But Fonterra is unlikely to be tempted; that Russian opportunity might be limited and they could be left with fewer clients elsewhere when the Ukraine storm blows over.
Here's an update of a story from last year - rare earths. You may recall the furor when China tried to limit exports. It was taken to the WTO over its actions and lost. The fear was that it would strangle key parts of high-tech manufacturing. Well it hasn't turned out that way, or turned out well for China. Prices have fallen 70% and China's rare earths market is a mess.
The news in the interest rate and currency markets is one of very low volatility. Prices for commodities, money and currencies are unusually stable at present
Equity markets rose modestly in New York today relieved about easing tensions in the Ukraine. UST 10yr yields are virtually unchanged at 2.43%. The US oil price is stable US$98/barrel, Brent is still just under US$105/barrel. Gold is down marginally and is now at US$1,318/oz.
The story is the same for currencies. We are still at 84.6 USc, still at 91.3 AUc, and the TWI remains at 79.3.
All this directionless stability is a trifle unnerving.
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 »