Here's my summary of the key events over the weekend that affect New Zealand, with news the US is using the TPPA to pressure countries it sees as currency manipulators.
But first, the US Fed's preferred measure of inflation (the PCE) barely rose in March as consumer spending remained weak, making it less likely that they will be able to follow through on their projected two interest rate increases this year.
The tame inflation backdrop was reinforced by another report showing only a modest advance in labour costs in the first quarter.
Other data showing a drop in consumer sentiment in April, the fourth consecutive monthly decline, and a softening in factory activity in the Midwest further supported the case for a single rate hike in 2016.
The official factory PMI in China stayed positive for the second month in a row following seven straight months of decline. Their services PMI stayed very expansionary.
India has banned the use of 2 litre diesel vehicles including SUVs in New Delhi as part of a plan to reduce pollution.
In Europe, economic growth is settling in at a low but better level. They are back to where they were before the start of the GFC, the last major economic area to do so. Their 'lost decade' is now behind them, just.
Over the weekend, Warren Buffet launched a broadside at professional fund managers, especially hedge fund managers. He said, “I hope you realise that for the population as a whole, American business has done wonderfully, and the net result of hiring professional management is a huge minus.”
In New York the benchmark UST 10yr yield slipped back and and is now at 1.84%.
But the oil price is unchanged, still just under US$46/barrel in the US, while Brent is now just over US$47/barrel.
The gold price is up sharply, now at US$1,290/oz.
And finally today, the NZ dollar opens at 69.8 US¢, at 91.7 AU¢, and at 61 euro cents. The TWI-5 index is now at 72.3. And over the weekend, the US named a number of countries as currency manipulators. It said the economic and currency policies of China, Japan, Korea, Taiwan and Germany are adding to the global economy’s problems, and these countries need to focus more on creating domestic demand rather than targeting others. It said the new type of trade agreements like the TPPA are a way to hold members to account on the matter.
If you want to catch up with all the local changes on Friday, 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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