Here's my summary of the key issues from over the weekend that affect New Zealand, with news of a surprise in Europe, of the positive kind.
The German economy expanded faster than markets were expecting in the final quarter of 2014 and this helped push overall Eurozone growth up as well. Given all the talk of Europe's woes, the surprise was palpable in markets worldwide. On Wall Street, the S&P500 rose to a record high.
And this was despite the widely watch University of Michigan US consumer confidence survey falling back from an 11 year high.
On the US West Coast there is a major labour dispute in the waterfront and that will bolster demand for our beef in the short term as Asia lines up alternative supplies.
In New York, benchmark UST 10 year bond yields were up noticeably on Friday too, to 2.05%, a one month high. With growth moving up in the US, Japan and now the EU, yields are responding to the trend.
Oil closed up for a second straight week on Friday after another drop in the American rig count and the surprise rise in EU growth, and Brent crude hit a 2015 high above US$60 a barrel. But market sceptics cautioned the rally could fade because new supplies just keep coming.
The oil price is now at US$53/barrel with Brent crude at US$61/barrel.
Staying with oil issues, HSBC's involvement with Brazil's Petrobras corruption scandal is becoming a major story, and at the same time HSBC is busy trying to sell investors bonds in the company, bonds that 'nobody wants'.
In Australia, the regulator there has put Macquarie Private Wealth on probation after finding "concerns about systemic deficiencies in [their] compliance with financial services laws".
Gold rose $5 over the weekend to US$1,228oz. Iron ore prices rose as well.
We start today with the New Zealand dollar holding its own against the US dollar at 74.3 USc. We are up again against the Aussie to 96.2 AUc and the TWI is at 77.8.
There is very little market leading data due to be released this week either here or offshore, but locally all eyes will be on the dairy auction early Wednesday morning.
Also worth keeping an eye on is the NZD-AUD exchange rate because it finished last week within a whisker of its all-time high and that record may be broken quite soon.
If you want to catch up with all the changes Friday 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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3 Comments
........"In Australia, the regulator there has put Macquarie Private Wealth on probation after finding "concerns about systemic deficiencies in [their] compliance with financial services laws".
Thats over the ditch, but it's the reason why New Zealanders rightly do not want to place their assets in the hands of the financial services. The services mine folks assets constantly aided by incompetence and sheer lack of balls by the regulator.
In New York, benchmark UST 10 year bond yields were up noticeably on Friday too, to 2.05%, a one month high. With growth moving up in the US, Japan and now the EU, yields are responding to the trend.
Yep, the 10 year JGB yield just doubled "overnight" without as much as a gasp from the local press - a montrous move given the high DV01. View graphs
Sorry to disagree David but the port dispute will not bolster demand for our beef but in fact lower the price NZ farmers receive for our beef. With US importers nervous of the backlog of product and how long it will be sitting on the wharves they are already withdrawing from the market lowering prices by 20 cents lb already and potential to get worse over the next one to three months. As a large proprtion of all cattle including prime ends up as manufacturing grade any impact on the US market will NOT be compensated by demand from Asia in the forseeable future. sadly.
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