Here's my summary of the key news overnight to keep you up-to-date over these holidays.
American consumer confidence increased in December, bolstered by a brightening jobs situation that left perceptions about economic conditions at a high last seen in February 2008, according to a respected report released overnight.
There are also signs house prices may be picking up in some US markets although the overall Case-Shiller index continues to ease slightly.
Those snap elections in Greece have markets on edge and index falls have been happening everywhere. But there seems to be very low likelihood of 'contagion' this time around. This time, it's just a European thing.
In China, and in a sign of things to come, ecommerce behemoth Alibaba and its consumer arm Alipay have entered the consumer credit market. They are now allowing some buyers to 'pay a month later'. A new service for Trade Me?
In Japan, their government said it would reduce corporate taxes by about 2.5% in the year beginning April 2015, the latest push by Prime Minister Abe to resuscitate his growth-revival plan.
In the oil markets, prices are not rising and are now at 5 year lows. The benchmark US price is finishing the year at just under US$54/barrel and the Brent benchmark is just under US$58/barrel. Even fires at some big Libyan refineries is not unsettling markets. In fact, huge amounts of new energy is coming on stream just as the year is ending. The whole story about low prices is all about excess supply. Now projects that can are being canceled, although there is a huge residual investment in new capacity which will come on stream.
Gold prices have popped up overnight and look like they may end the year over US$1,200/oz. But may investors have had enough of 2014's poor returns.
UST benchmark 10yr bond yields fell back in New York again today to end the year at at 2.17%. We saw similar falls in NZ swap rates as a result. The 1-5 curve is at only 27 bps and the 2-10 is at 30 bps which are six year lows.
The NZ dollar is ending 2015 sharply higher at 78.3 USc, we are at 95.7 AUc (it got as high as 95.8 AUc earlier this morning), and the TWI is at 79.5. We are also back over 50 English pence, and at 54.4 Euro cents.
The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here » Have a fun, safe New Year celebration.
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5 Comments
1a) Of more concern if you are a growth monkey, that probably for the last 10 years the World has not been buying all that china can and could produce. \
1b) I think there is a side of economics (mostly on the right) that is delusioned on what ppl can pay for a good thinking its un-limited. Not a lot of sign that there is recognition this isnt the case and that demand collapses as ppl become financially distressed. eg Expect more of the likes of Solid Energy as well.
2) Tulips spring to mind.
I'd like to see the free market pan out on prices but famrers topping themselves after going bankrupt is a bit OTT. Then there is the effect on the banks, not so dismayed if the bank salesmen top themselves but the bans going insolvent and us having an OBR wont be good.
Will never happen of course....
yeah right.
LOL - too true.
If Thomas Malthus had lived in an era of regulation, he would have postulated a new Malthusian law: regulation expands exponentially, whereas productivity improvements occur only linearly. Hence in a modern society regulation will always outstrip productivity growth and eventually send productivity into a decline from which there is no exit. Regulation expands from two directions: from the growth in regulatory agencies (each one has to justify its own existence) and from the creation of new economic activities (regulators and special interests can find new and hitherto unimaginable dangers in anything that hasn't been done before).Read more
I can't see the point of it all. If we are spending 1/3 of the day writing up reports about what we did for the rest of the day, how is this good for the country? In farming, Nathan Guy talks about us increasing production. While increasing regulation through regional council and worksafe and biosecurity means (if you can afford it) i think cutting production may be the best option. Why support the unproductive regulators? It will be interesting if the big influx of foreign investment in NZ farmland gains momentum. I wonder who would want to invest here with a growing trend in regulation? Tradtionally the private sector has all ways been smarter and more innovative than the public sector. And yet the regulators are taking over.
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