Here's my summary of the key events overnight that affect New Zealand, with news that dairy prices fell again early this morning in the latest auction.
This fall was -7.4% in US dollar terms, -6.3% in NZ dollar terms. Milk powders fell -8%.
The fall was not a market surprise as it had been well signaled in the NZX derivatives market. But it was slightly larger than expected.
The kiwi dollar fell immediately after the results were posted although it has clawed back about half the fall since.
This is the second consecutive fall following four very strong consecutive rises. Overall, prices have retraced to where they were in September and are probably still below where they need be for economic dairy farming for many in the business.
Elsewhere, the American car industry is on track for a record year of annual sales as the top carmakers reported October sales that far exceeded expectations. However, US general factory shipments nationwide in September were disappointing, dropping for the second straight month.
Speaking of car companies, VW's cheating is proving even deeper than originally reported. The US EPA has said a much wider range of vehicles are involved with more defeat software found than has been admitted to. The icon SUV Porsche Cayenne and various Audi models are now involved.
An interesting note on a Chinese website shows that New Zealand is now the third largest exporter of food to that country, after the EU and the US, and well ahead of Australia who is sixth. We are playing in a trade with some very large rivals.
And staying in China, their president has said that +6.5% growth is now their bottom line. That level is needed he said to double average income by 2020 over 2010 levels. It might be a tough ask as their economy slows as it transitions to a consumer-led basis.
In New York today, the UST 10yr yield benchmark rose further and is now at 2.20%. Markets are starting to believe a rate hike is coming from the Fed in December. NZ swap rates rose in sympathy yesterday and will probably do so again today. Rate rise noises are also coming from the UK.
The US benchmark oil price has also risen today, now at US$47/barrel, and the Brent benchmark is at US$50/barrel.
However. the gold price has fallen sharply, now at US$1,118/oz.
The New Zealand dollar starts today lower on the dairy auction results at 66.8 US¢, at 93.1 AU¢, and at 61 euro cents. The TWI-5 is at 71.9.
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 »
Daily exchange rates
Select chart tabs
26 Comments
Unlikely to help - fostering binging on cheap debt fueled asset growth is the cause of the problem.
After years of ZIRP (and QE), finally it has dawned on the "smartest people in the room" that neither ZIRP nor QE do much, if anything, to boost the economy. In fact, judging by the secular stagnation the world finds itself in primarily as a result of the $200+ trillion in debt that ZIRP (and QE) have unleashed, growth is contracting with every passing year. Read more
Well considering it is pretty well established economics that lowering the OCR helps SME's businesses, which is the idea of the comment I do not agree.
Now sure the financial parasites will be better off as well, that is an un-fortunate side effect of keeping the patient alive. Time me thinks to have some good targetted anti-biotics used to kill off the unwanted bugs.
Well considering it is pretty well established economics that lowering the OCR helps SME's businesses, which is the idea of the comment I do not agree.
Stop making it up - you are a thinly veiled real estate bubble advocate.
As an owner of a number of businesses across a range of sectors (including manufacturing) I can provide some perspective on the efficacy of interest rate reductions on our propensity and willingness to invest — in short, it has little or no impact. Read more
Chuck in the absence of dairy farm cheques and they gotta be choking.
I find it hard to beleive that this was not a 'business' decision by VW. They know that the opposition would be pulling these vehicles apart to see how they managed to get performance and mantain environmental standards. Eventually they must have known they would be found out. Interesting to see if there was a contingency fee in their budget for when the beens were spilt.
Notice the difference between these 2 articles.
NZ Herald:
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=115395…
New warning over Antarctic ice
Scientists say key area may have already been destabilised, raising the risk of a 3m rise in sea level
And Breitbard:
http://www.breitbart.com/big-government/2015/11/02/nasa-shock-study-ant…
NASA SHOCK STUDY: ANTARCTICA IS GROWING NOT SHRINKING
Antarctica is growing not shrinking, according to the latest study from NASA. Furthermore, instead of contributing to rising sea levels, the still-very-much-frozen southern continent is actually reducing them by 0.23 mm per year.
The study – by an organization not hitherto noted for playing down environmental scares – will come as a major blow climate alarmists. For decades, they have cited Antarctica as one of the bellwethers of global warming catastrophe and have claimed – as the IPCC’s most recent Assessment Report did – that its land ice mass was slowly melting into the sea.
You didnt read this did you? One talks about long term ice that has not melted in milenia now melting at an accelerating rate v a weather effect for surface ice/snow which is declining.
As the study from nasa says,
"But it might only take a few decades for Antarctica’s growth to reverse, according to Zwally. “If the losses of the Antarctic Peninsula and parts of West Antarctica continue to increase at the same rate they’ve been increasing for the last two decades, the losses will catch up with the long-term gain in East Antarctica in 20 or 30 years -- I don’t think there will be enough snowfall increase to offset these losses.”
The NZ herald lays out the differences,
"While previous studies "examined the short-term future evolution of this region, here we take the next step and simulate the long-term evolution of the whole West Antarctic Ice Sheet", the authors said in the Proceedings of the National Academy of Sciences, which was published yesterday."
Also the Nasa study seems to end at 2008 so it looked at 7+ years old data with a reducing trend even by 2008.
as per,
"According to climatologist Michael Mann, who was not involved in either study, the use of older satellite data could be the cause for the disconnect.
"It sounds to me as if the key issue here is that the claims are based on seven-year-old data, and so cannot address the finding that Antarctic ice loss has accelerated in more recent years," he said."
On top of that,
"“There is no quality data to support the claims made by the authors of [ice] growth in East Antarctica,” said Eric Rignot, principle scientist for the Radar Science and Engineering Section at NASA’s Jet Propulsion Laboratory."
so a bit of cherry picking maybe.
Hopefully this better explains the "cheery picking"...
http://mashable.com/2015/11/03/nasa-antarctica-mass-gain/#jL8K7gbQ9Pqw
Yes... there has been more snowfall (weather) but the climate is still FUBAR.
http://i100.independent.co.uk/article/bill-gates-says-that-capitalism-c…
The world’s richest man, Bill Gates, has said that the private sector is too selfish and inefficient to produce effective energy alternatives to fossil fuels.
While announcing his plan to spend $2 billion of his own wealth on green energy during an interview with The Atlantic, the Microsoft founder called on fellow billionaires to help make the US fossil-free by 2050 with similar philanthropy."
-Porsche and Audi diesel engine cheat devices.
Didn't the VW bosses claim that this whole cheat device thing was the fault of only 10 engineers who kept it totally secrete to themselves. This is now so widespread that there claims and protestations of management innocence/ignorance is totally impossible to believe.
Beyond credible. I find it impossible to believe that engineers would have knowingly done this unless with the insistence by their managers.
If I was asked to do something like this I'd be requesting clarification that the managers had addressed any legal issues. ie write emails and keep copies.
Ha Ha German efficienty is one of those stereotypes that is so wrong
yes german companies loves heap of paperwork and record keeping and that normal boggs down the whole process making them less efficient
http://theloadstar.co.uk/dp-dhl-finally-abandons-ill-fated-nfe-it-proje…
this from someone that has worked for german companies
Barfoots October data - sales volume down 21.4% compared with September. They sold 1,068 homes but listed 1,820 and now have listed 3,624 homes - the greatest level of stock since March.
Their October sales volume was the lowest since February. So that data would appear to clearly indicate it has moved into a buyers market. What he doesn't mention is that sales under the hammer in the auction rooms are now hovering at just above 30% and that there are very few Chinese faces in the auction room these days.
http://www.barfoot.co.nz/market-reports/2015/october/market-update
How our dairy farmers can even consider palm cornel as an option beggars belief...disgraceful.
http://www.theguardian.com/commentisfree/2015/oct/30/indonesia-fires-di…
Palm oil is the most widely consumed vegetable oil on the planet, and it is in about half of all packaged products sold in the supermarket. While palm oil is the most efficient source of vegetable oil, its rapid expansion threatens some of the planet’s most important and sensitive habitats.
http://www.worldwildlife.org/pages/which-everyday-products-contain-palm…
Once the palm oil is produced you are left with the palm kernel expeller, so it's another waste product of modern consumer living that is being fed to livestock. I'd say the dairy farmers should stop using it, about the same time that supermarkets stop selling products containing palm oil, and customers stop buying it.
http://www.declineoftheempire.com/2015/11/theres-always-someone-to-blam…
What he knew he knew well. Unfortunately, what he did not know he did not suspect existed.
Do you consider the consequences when you buy biscuits chippies chocolate Rastus? The damn stuff is in so many foods. It fair upsets my gallbladder, its forbidden in my diet now. Pity the poor cows. Chomping that stuff everyday would take you swiftly to your grave.
I do what I can. My point being that we could have gone down two paths. High quality, lower volume with every effort to be seen as environmentally aware. Build on the fact we inherited one of the last special places on earth. But what are we doing..... We are doing our best to mimic the rest of the world and maintaining such a strategy will eventually remove the green aura we have...just another also ran polluted, overcrowded with an uninspiring bulk product to peddle.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.