Here's my summary of the key news overnight in 90 seconds at 9 am, including news that it is apparently aging Americans that will drive the world economy over the next 10 years.
But first, the World Bank said overnight that it has cut the growth target forecasts for China to 7.4% in 2014, 7.2% in 2015, and 7.1% in 2016. And the bank expects the overall East Asia and Pacific region to grow 6.9% in 2014 and 2015, down from the 7.1% rate it had previously forecast.
The European Union is reported to be preparing to reject France’s 2015 budget, setting up a clash that would be the biggest test yet of powers for Brussels that were designed to prevent a repeat of the eurozone’s sovereign-debt crisis.
And staying in Europe, German factory orders fell in August by their largest amount since the height of the global financial crisis in 2009, according to economy ministry data.
In the US and following the encouraging September jobs report, which showed unemployment dipping below 6% a new official review of future jobs growth is painting an optimistic, but also unsettling picture.
The Review dismissed warnings that stalled incomes, changing demographics and tighter credit could make consumer spending less capable of powering the American economy. By examining the relationship between consumer spending and jobs during the GFC and into the future, the BLS projected that spend-happy Americans would continue to account for more than 70% of that country’s total output and more than 63% of the nation’s jobs in coming years. Their future employment will be driven by the healthcare industry, they say.
In New York, UST 10 yr yields fell slightly overnight to 2.43%.
And the oil price is just on US$90/barrel with the Brent price just above US$92/barrel. Markets are choking on oversupply.
Gold bounced back up today and is now at US$1,207/oz.
We start today with our currency level pegging against nearly every other one we benchmark against. The NZD is at 77.9 USc, is at 89.3 AUc, and the TWI is at 76.2.
If you want to catch up with all the changes on Monday 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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14 Comments
however better news re China and Germany trade concerning milk (and beyond WMP)
from outside looking in (Oct_14):
EU countries are expected to increase raw milk production by 11% from 2012-2023 http://www.tetrapak.com/DocumentBank/Dairy-Index-Presentation-2014.pdf The lifting of the EU’s milk quotas is expected to spur increased exports of German milk to China, particularly milk powder, UHT milk and flavoured milk, creating further opportunities for German dairies. http://www.tetrapak.com/DocumentBank/TetraPak_DairyIndex_report_2014.pdf and from inside looking out (Jun_14) - new detail re market data: Anchor UHT milk in China, Retail price equivalent to NZ$4.50-5.00/L. - page 26 Implications for producers in and outside China - page 37- China already dominates the global traded market for dairy commodities
- Small changes in China’s demand and supply balance have a large impact on the global market and therefore commodity prices – producers should endeavour to keep up to date with Chinese market trends
- Near term demand slowdown due to pricing, needs prices to be right to lure back demand
- Mutual concentration risk exists (particularly between China and New Zealand for whole milk powder) and diversification will be a mitigating strategy
- High milk production costs in China will result in imported product remaining attractive and continuing to play an important role in fulfilling demand
- Regulatory changes in China will continue to impact the supply chain and all participants will need to keep informed and adapt quickly
- Chinese dairy consumers are already sophisticated and place high expectations on milk producers for quality, food safety and sustainability characteristics – providing a high level of evidence in these areas will become increasingly important
An estimate of China powder inventory
China was apparently sitting on a record-high 400,000 metric tons of milk powder in July, according news reports from Beijing. These reports project that it will take until October or November for China to work through these stocks given the supply that is being added.
http://www.mctdairies.com/Compass/2014/MCT-Dairies-Compass-2014-09.pdfUS labour participation rates have been in a straight down line since 2008:
http://data.bls.gov/timeseries/LNS11300000
Very odd n'est pas?
Perhaps the US unemployment figures aren't what they seem.....
Perhaps the US unemployment figures aren't what they seem.....
Depends how you want to interpret them - Behaviour: The Control of Perception .
When a doctor tells you you have terminal lung cancer and are going to die, its a sure thing, its terminal but sometime off in the future. The Doctor doesnt say 5months, 4days an 22mins from now. He might say 6~12months maybe longer if the chemotherepy works....so maybe would will get 6months, or 2 or 5 years, you will not get 20 years.
I'd guess you believe on a flat earth. Otherwise mathematically we live on a sphere which is finite, even if it was all oil eventually there would be no planet left.
Going back to oil the price is set on the demand v supply. So if there seems to be more available which drops the price but no more is actually being produced that indicates less demand. Less demand suggests another recession is coming. When you look at the prices of other things like commodities and the transport of them via the BDI which are all down that all looks pretty dire.
regards
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