Here's my summary of the key issues from over night that affect New Zealand, with news on the TPPA front.
A proposed American law to give their president authority to negotiate and sign the Trans Pacific Partnership Agreement won a key vote in the Senate overnight, bringing the measure closer to what is expected to be a more difficult path in their House of Representatives next month. More strident anti-trade voices are gathered there.
American home resales volumes unexpectedly fell in April as tight inventories pushed prices higher by almost +9%, giving a cautious signal on the strength of the housing market.
Initial claims for unemployment benefits rose marginally last week but the four-week moving average of claims, considered a better measure of American labour market trends, fell to a fresh 15-year low.
US factory output growth weakened for the second month running in May but the sector is still strongly expanding. However, new order growth rose its slowest since January 2014 but a strong pace of job creation is being maintained.
A very similar situation exists in Europe.
But that contrasts with slippage in China where everything seems to be slowing, even if it is at a slower rate.
Back in New York, the UST 10yr benchmark yield gave up some of its recent gains, and it is now at 2.22%.
The US oil price rose again in trading today and is now at US$61/barrel, while Brent crude is at US$67/barrel. Lower US stock levels motivated the change.
The gold price is marginally lower however at US$1,204/oz.
The New Zealand dollar starts today pretty much unchanged at 73.2 US¢, at 92.8 AU¢, and at 65.8 euro cents. The TWI-5 is at 76.8.
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 »
13 Comments
The LA Times nails it:
http://www.latimes.com/business/la-fi-cheap-oil-20150520-story.html
''If there was one thing most economists agreed on at the start of the year, it was this: Plunging oil prices would boost the U.S. economy. It hasn't worked out that way.
The economy is thought to have shrunk in the January-March quarter and may barely grow for the first half of 2015, thanks in part to sharp cuts in energy drilling. And despite their savings at the gas pump, consumers have slowed their spending.
At $2.71 a gallon, the average price of gas nationwide is nearly $1 lower than it was a year ago. In January, the average briefly reached $2.03, the lowest in five years.
Cheaper oil and gas had been expected to turbocharge spending and drive growth, more than making up for any economic damage caused by cutbacks in the U.S. oil patch.
Consider what Federal Reserve Chairwoman Janet L. Yellen said in December: Lower gas prices, Yellen declared, are "certainly good for families.... It's like a tax cut that boosts their spending power."
Other experts were more direct: "Lower oil prices are an unambiguous plus for the U.S. economy," Chris Lafakis, an economist at Moody's Analytics, wrote in January.
So what did they get wrong?....etc etc etc
This 'the oil price fall is unambiguously good new for the US economy' hokum was extensively promulgated on this site as well a few months back I recall, with a few dissenting voices.
Oh dear, another one the opinion formers dressed up as economists got wrong.....
meh, what would economists know?
I don't know why we still listen to them. Maybe they should all be burned at the stake.
It's Not About Free Trade. It's about Trading Our Freedoms.
It would be better if the TPP was initially signed without Japan and the USA. Partnerships are better for all parties if they are agreements between equals. With the USA and Japan in the deal initially, their power and influence will swing it strongly in their favour. The smaller countries intimidated by the power of the USA and with questionable hope of gaining large benefits in huge markets, will agree to less than what is in their best interest. History has proven that any country that has signed an FTA with the USA has ended up loosing more than they gain.
It would be better if we excluded them especially initially and agreed with other smaller countries, a deal that is mutually beneficial and provides critical mass and competitive advantage in the face of the dominant nations. Then at some point down the track we could consider admitting the USA and Japan, but on our terms only.
I think it would be better if the TPP just disappeared altogether.
Agree. On the other hand, it is good to remain onside with a military/bankster oligarchy that has stockpiles of WMDs and loves to invade countries, especially those that have oil under their land and seas.
Yes, agree, definitely good to remain onside with both China and Russia. Not just one.
Oh, wait, you meant the US of A? The one who gets told last about developments like the AIIB? http://economictimes.indiatimes.com/news/economy/finance/china-india-ru…
The one who has so thoroughly lost it in terms of ME foreign policy that the House of Saud is out shopping for (whisper it) nukes?
The one who is coddling the Iran Twelvers towards their own ka-boom? http://www.frontpagemag.com/2013/robert-spencer/now-the-twelfth-imam-ca…
Truly, policy choices are between really bad, and absolutely shocking....welcome to modern diplomacy...
yes, let us take a big gamble on China.
http://www.bloomberg.com/news/articles/2015-05-21/goldin-s-pan-just-los…
Maybe these economisseds also need to understand the definition of a surplus and a budget...too.
I saw in something I was reading this morning, refering to the dangers of a plutocracy, tht is the power and privilege all being in the hands of the wealthy. Democracies are supposed to prevent that, but Polly greed has ensured that the plutocrats are getting more and more influence and stopping governments from exercising the powers in the name of the PEOPLE! The TPPA is looking like another attempt by the Plutos (are they just another Disney dog?) to further their own cause. Obama after failed to hold the big banks to account for the crisis they caused, so has he become another lapdog for them?
Not become lately. The only way to get there is to first pledge subservience to them. It's the way modern oligarchies work while pretending to be democracies, including here.
...any great minds read anything into this..
http://www.watoday.com.au/business/markets/first-hanergy-now-goldin-hon…
Jeez, will be in Honk Konk next week....I will have a look for the missing..Billions...or was it just another Ponzi.
Would I be wasting my time...Billions is a lot to lose...maybe it is headed for NZ.. already....do ya think.?
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