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US Fed and BofE members struggle with timing of rate rises; China carbon price mistakes; Aussie bitcoin ruling; 3-D printing; NZ$1 = US$0.838, TWI = 79.0

US Fed and BofE members struggle with timing of rate rises; China carbon price mistakes; Aussie bitcoin ruling; 3-D printing; NZ$1 = US$0.838, TWI = 79.0

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of setbacks and policy stumbles.

As rate rises in both the US and the UK become a real possibility, we are seeing an interesting split of views among the policy makers that must make these calls.

US Fed board members have been speaking about the issue, but with contrasting views, and the same is happening at the Bank of England. We don't get that sort of dissonance in New Zealand because Graeme Wheeler alone has that judgment to make.

In China, their carbon trading scheme is set to start with a huge supply of free permits. Carbon prices are expected to be very low indeed. In fact, the whole thing looks like a repeat of the European debacle. In the rest of the world, carbon is basically free.

In a setback for bitcoin in Australia, their tax office has ruled it is not a currency, rather more like a barter trading platform. And therefore bitcoin platforms will need to pay GST on each transaction. No doubt the IRD here will follow suit in the name of harmonisation.

And here's something that is not 'overnight' news but rather a long term trend, one that is starting to make an impact on the way factories and miners think about the goods they supply.

3-D printing is evolving very quickly and the materials are evolving equally fast. The expectations that major airplane components, and whole houses, can be built that way. But the real excitement is for design - avoiding the limitations of current factory production. The powderising of the necessary ceramics, plastics and metals is going to shake up engineering in a major way. Be thankful New Zealand depends on 'food' and not traditional 'factories'. A revolution is on our doorstep.

UST 10yr benchmark bond yields rose 1 bp today and are now at 2.41%.

The US oil price has stabilised and is just over US$96/barrel. Brent is also basically unchanged at US$102/barrel. Gold fell further - about another US$4/oz - and is now at US$1,290/oz.

We start today with our currency lower on a rebounding US dollar. In fact we are near a six month low against the greenback. We are at 83.8 USc, 90.3 AUc, and the TWI is at 79.0 and that is also near a six month low.

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

Rate rises in the US and UK are still less than certain.  

As NZ will/is discovering economies are now much more sensitive to rate rises now than pre GFC.  

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