Here's my summary of the key issues from overnight that affect New Zealand, with the news focus back on Greece.
But first, new orders for American factory goods recorded their biggest increase in eight months in March, boosted by demand for airplanes, however the underlying trend is not so impressive. (But there is one leading indicator that suggests the downside is overstated.)
Even less impressive is the latest factory data out of China. Their factories suffered their fastest drop in activity in a year in April as new orders shrank, hardening the case for fresh stimulus measures to halt their slowdown.
The same data out of the Euro zone was relatively positive, although France is definitely not a bright spot.
And things have turned positively grim in Greece. Not only is their factory sector contracting, there is strong evidence their government is domestically insolvent and they have now lost their only European friend. The IMF is now cracking the whip; the big problem is that during all the recent negotiation, Greece has made virtually no effort at all on reform. EU anger is palpable. The crisis is coming to a head fast.
Back in New York, the UST 10yr benchmark yield rose again earlier today to 2.14%.
The US oil price held at US$59/barrel, while Brent crude also held at US$66/barrel in todays trading.
The gold price however recovered some recent losses and is now at US$1,189/oz.
The New Zealand dollar starts today marginally higher at 75.3 US¢, at 96.1 AU¢, and 67.6 euro cents. The TWI-5 is now at 79.2.
And finally, at 4:30pm today the Reserve Bank of Australia is widely tipped to cut its official policy interest rate for the second time this year, despite some signs their economy may be stabilising. If it actually happens that would take their OCR down to 2%.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »
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5 Comments
Re Greece: - This may seem an odd thing to say , but the Euro needs to be shown that like any currency it is not bullet proof .
A Greek default will be a massive and unpleasant reality check for European Banks who thought lending to Governments in the Eurozone was "risk free " and still charged a risk premium ( albeit a small one )
The Euro experiment was always flawed , it allowed in-coming members to fudge their deficit numbers, and come a long for the free ride .
The downsides were always there to see .
The only people who were honest were the Germans , the Dutch and the British , and the latter was not allowed in due to its deficit . The French were nonchalant , the Southerners were blatantly dishonest and the rest in history .
Greece is a seriously unproductive country , and it can never repay its debts
The matter needs to get put to rest , as its dragged on getting nowhere for too long , and Greece needs to get out of the Euro so it can recover and get rehabilitated
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