Here's my summary of the key issues that affect New Zealand overnight with news of slower growth indicators in the US.
American retail sales were much weaker in January than markets were expecting. They were expecting a -0.4% drop from December due to lower petrol prices but the data showed a -0.8% drop.
In addition there was a surprise rise in the number of initial unemployment claims last week. Markets were expecting another sub 300,000 number but they got one higher than that benchmark. The raw number was even higher.
The detail in both sets of data was not so scary but together markets have marked down the US dollar today and lowered benchmark interest rate yields.
In Europe overnight, Sweden's central bank has cut its key interest rate from 0% to a record low of -0.1% and has started a program of quantitative easing.
The EU meeting trying to decide what to do about Greece has started but there are no firm decisions to report yet. Early Twitter reports suggest "EMU members have unanimously refused Greece's plan of a new deal". The Greeks are proving hard to pin down.
And an apparent 'peace deal' has been reached over the Ukraine that requires little from Russia. At the same time the IMF has announced a US$17 bln loan program to the war-torn country.
In Australia, their unemployment rate jumped back up to 6.4% in January, making its surprise fall to 6.1% in December short-lived. However the boss of the Australian Bureau of Statistics has doubts about the reliability of their labour market stats.
In New York, benchmark UST 10 year bond yields are down marginally to 1.97%.
The oil price has risen as the US dollar has fallen and is now at US$51/barrel with Brent crude at US$57/barrel.
Gold is however unchanged from this time yesterday at US$1,223oz. Demand for gold is at a four year low with the anti-corruption campaign in China undermining its attractiveness.
We start today with the New Zealand dollar higher against the weaker US dollar. It is at 74.5 USc, we are up again against the Aussie to 96.1 AUc and now very close to an all-time high.The TWI is now at 77.8.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with event risk is by following our Economic Calendar here »
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US to be subject to never ending drought:
http://www.theguardian.com/environment/2015/feb/12/us-faces-worst-droug…
''The US south-west and the Great Plains will face decade-long droughts far worse than any experienced over the last 1,000 years because of climate change, researchers said on Thursday.
The coming drought age – caused by higher temperatures under climate change – will make it nearly impossible to carry on with current life-as-normal conditions across a vast swathe of the country''
Meanwhile the drought situation in Brazil (primarily in the Sao Paulo area) gets more serious by the day:
:http://www.citylab.com/weather/2015/02/no-one-is-quite-sure-how-sao-paulo-will-survive-its-drought/385211/
http://www.theguardian.com/global-development-professionals-network/2015/feb/11/brazil-drought-ngo-alliance-50-ngos-saving-water-collapse
The Financial Times (article behind a paywall), states that the drought will tip Brazil into recession (via effects such as a fall in hydro-energy production etc).
Jeez climate change is sure bringing a host of opportunities. Luckily we have an abundance of water. Oh wait, hang on a minute......
Australian Government cracks down on foreign buyers, while
John Key monitors measures to control foreign investment in AU land and residential real estate
As of March the threshold for overseas purchases of agricultural land will be reduced from $252 million (per transaction) to $15 million (cumulative).
The Foreign Investment Review Board will scrutinize all sales over $15 million and the threshold will apply to the cumulative value of land already owned by the investor
Institutional investors, pension funds want a minimum amount of investment to make it worthwhile being invested in any country in the world.
Proposed restrictions will drive investment elsewhere to friendlier jurisdictions such as NZ
Announcements on reforms to foreign investment in residential real estate are expected in coming weeks
from David Chaston...or, the Big Dawg?
Just musings from an interested reader...
Looked on the about us, saw who the publisher was, went to companies office...low and behold, owned by one big dog David Chaston.
Am I right or missing something?
Not that it matters, but well done DC - seems like a good business you've got. Dont sell to NBR or NZME! Nice having an indepedent financial resource like the one you (and your team) have built.
xoxoxo - the keyser.
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