Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a sinking NZ dollar and a sudden dip in swap rates.
But first, the number of Americans filing new claims for unemployment benefits unexpectedly rose last week, up by 11,000 s.a., but that probably does not signal a material shift in US labour market conditions as these claim levels remain near their pre-recession numbers. Besides, the week reported included a holiday day, and the unadjusted raw data saw a fall of 15,000.
The US Federal deficit came in lower than expected at US$129 bln in August. Analysts were expecting $133 bln, and the same month a year ago the deficit was US$148 bln. Tax revenues are rising and outlays are falling. There is now a good chance the full fiscal year to September deficit may be lower than $500 bln, a 26% improvement over 2013, and below 3% of US GDP.
China's consumer inflation rate in August was +2.0% a four-month low. On the other hand, factory-gate prices have now declined for 30 straight months in China, adding room for government stimulus to support the economy amid a property slump.
In Australia there was an astonishing labour force data release yesterday. There are warnings it was a rogue number and it looks like it was. A month after the unemployment rate hit 6.4%, it’s back at 6.1% with a remarkable 120,000 jobs created in one month. No-one seems to be taking it seriously.
The UST 10yr benchmark bond yield held at the 2.53% level. However overnight NZ swap rates took a noticeable tumble across the board, falling -4 to -6 bps.
The price of oil had a small bounce overnight. The US oil price is now under US$93/barrel and the Brent benchmark is now a tad over $98/barrel. The IEA cut its demand forecasts for 2015 overnight citing the European slowdown, and to a lesser extent lower demand growth in China. They also noted "robust non-OPEC supply growth".
Gold is unchanged, still at US$1,244/oz.
We start today with our currency lower against the US dollar but level-pegging against most other currencies. We are now just on 81.8USc and its lowest since early February; we are up against the Aussie at 89.8 AUc, and the TWI is at 78.4. It little to do with Graeme Wheeler's push against the NZD, rather all to do with a surging US dollar.
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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13 Comments
Falling demand for commodities, milk down again, USDA dairy prices all back again last night.
http://www.cnbc.com/id/101966792#
How would you like to be farming wheat?
http://finviz.com/futures_charts.ashx?t=ZW
or corn
Thanks Andrew, great link. I started reading the ingrediants on food I brought about 10 years ago, and continue to be amazed just how much sugar keeps being added to our daily food. What amazes me further is that not many people seem to care what they eat each day, too busy and just need a sugar fix. Shockingly I just found out that Kiwi wine makers add it to our wine? What next our beer?
Adding sugar to wine has been happening since at least 1765. It's called chaptalisation and is not to make the final wine sweeter but to give the yeast more more to turn into healthy, tasty alcohol. This benefits a wine by giving it more body. This is normally practiced in cooler climates where grapes cannot naturally produce enough sugar. It can also be done in the beer and cider making processes.
If you want to avoid this process, then pick a warm climate wine. However, these wines tend to have acid added (mostly tartaric but sometimes citric and malic) to bring them into balance.
Sugar is cheap and addictive, what not for a manufacturer to like?
Try looking at some of the "Masterfoods" stuff, some have a huge % of sugar.
For myself I look at the labels and pick the ones with the lowest sugar content as a starting point, bt its hard now to get say tomato sauce below 25% sugar, and Ive seen 37% I think.
:/
I guess the addictive thing is why people continue to buy stuff. Because it's certainly not taste. Like you Steven I am avoiding the sugar as much as possible, but because of the bland mushy taste it gives. Tomato Sauce for instance, is so much more tasty with less sugar.
A friend did a food technology degree at Massey. The story was horrifying. Certainly nothing to do with good food. More about adhesives to hold cxxp together before it went into the packet, and how to bind (glue) water into the product if it was going to be sold by weight.
yes, and the Q is why.
The baltic dry index is also 27% down on the year.
http://www.bloomberg.com/quote/BDIY:IND/chart
So a real slowing in demand? which suggests another recession on the way.
regards
China's financial system is "almost certain" to face a full blown banking crisis according to a senior international economist.
Gabriel Stein, of economic consulting firm Oxford Economics, told a Sydney audience on Tuesday that Chinese authorities were understating the extent of bad loans on their banks' books and faced tough choices in dealing with the potential bank failure. http://www.smh.com.au/business/china/china-banking-crisis-almost-certai…
http://www.smh.com.au/business/westpac-chief-warns-of-world-financial-m…
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