Here's my summary of the key news overnight where it is getting clearer the American economy is outshining the rest of the world.
Manufacturing activity in the US unexpectedly jumped in October as new orders grew strongly, which should ease concerns of a significant moderation in economic growth in the fourth quarter.
That's according to one widely followed survey. Another similar but lesser one showed a slowing. Both however have conditions strongly expanding in October.
American car sales did well in October. In fact New Zealand new car sales are doing well also, up +12% over the same moth a year ago.
Fading somewhat was American construction activity - in September. The Commerce Department data showed that private projects basically held their own, but public projects are where the declines are being felt. August data was revised higher.
Factories across Asia and the euro zone reported a general loss of momentum last month that speaks volumes about the need for more policy stimulus on top of Japan's latest efforts to ignite growth.
And following the Bank of Japan's new stimulus plan, markets now expect the ECB to soon announce it has started buying sovereign bonds.
In the UK, HSBC has set aside a bit less than US$400 mln to settle with British regulators in their investigation of potential manipulation of foreign exchange markets. The RBS has made an even larger provision for this issue.
The serious lobbying against lower bank leverage is starting. In Australia the big banks are starting to push back from what they see will be a major recommendation by the Murray Commission: that they should hold significantly more capital to strengthen their financial system. Westpac is saying "you will all pay" if that becomes the new reality.
Yesterday, Fonterra released a major document outlining its plans for growth in China. The 130+ pages make fascinating reading. That comes as rival Danone decides to invest US$0.5 bln into the same markets.
In New York, UST 10yr bond yields rose again in early trade today and are now at 2.36%.
Stocks are at record-equaling levels, above 2,000 on the S&P 500 and above 17,300 on the Dow.
The oil price is basically unchanged at US$80/barrel with the Brent price just on US$86/barrel.
The gold price fell again and is now at US$1,167/oz. That is its lowest since May 2010.
We start today with our currency lower. It is now at 77.2 USc and that is near a two year low, at 88.9 AUc, and the TWI is at 76.2.
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 »
Daily exchange rates
Select chart tabs
10 Comments
New car sales are suposedly an indication of economic activity , the concern I have is the amount of debt being incurred to buy .
We are spending like drunken sailors on things that diminsh in value , and whose only advantage is a depreciation allowance
The vehilces will lose value so faster as more used vehicles flood the market
The other matter to consider is fleet purchases , often there is a spike if Avis or fleet managment lease companies buy a large nujber of vehicles , so the figures may have anomolies
or as rastus has posted how about new ones held off the market to prop the system up?
http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die
mind boggling.
Got to wonder on the losses that will be booked, and of course the pension funds who hold the shares. When does action like this become fraud?
regards
...seems to be a bit of an oversupply..
http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die
OMG........
https://www.google.co.nz/maps/place/Sheerness,+Kent,+UK/@51.4298123,0.7…
and with the GFC and mkII and peak oil these will never be sold.
I talked to an 85 year old mate in Scotland yesterday and he has just bought abrand new Suzuki Alto at 25% discount, reportedly told by the salesman, discount due to a major glut in supply.
And may I hasten to add, way, way cheaper than all 2014 models advertised here, but then what isn't.?.
He says it will see him out.
Um, MarineMale, don't ferget that a substantial chunka 'sales' is Commercials.
Living as Ah do in Christchurch (total EQ damage a scratch to the ski-wagon, coupla wrinkles in the gib, and driveways/paths heaved by maybe 15mm), it's hard not to notice the sheer number of double-cab utes, panel vans, trucks etc which are all, essentially, tradie vehicles, and are being paid for by insurance proceeds.
Whereas, as Jeremy Clarkson thoughtfully notices, most ordinary woikers have a small grey battered hatchback.....
Which rather gives point to DC's headline aboot two speeds, eh?
Loverly pictures. But even undoctored pics can lie.
There is no information here despite the rave-on commentary around the pictures. How long have these cars been here. For all we know these parks could turn over every few weeks. Give us some model numbers, age of the cars in the parks, turnover rates etc. Then we might be convinced.
Anyone for the latest NFC credit card vulnerability
http://www.wired.com/2014/11/chip-n-pin-foreign-currency-vulnerability/
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.