Here's my summary of the key events overnight that affect New Zealand, with news the oil price has nudged above US$50/barrel today.
But first, the US released its labour productivity metric today, the relationship between output and the amount of worker cost inputs. This data gives a view of the US labour market at odds with the weekend non-farm payroll report. Today's data shows American labour productivity falling because US employers are hiring faster than output growth and paying more than they are getting in price increases. Unit labour costs rose +4.5% in the past year. This data hardly shows a weak labour market. But it might point to profitability problems for US companies.
Economic growth in the first quarter of 2016 for the euro area was +1.7% pa according to Eurostat. This final level is a little higher than originally estimated.
And, cloud accounting software provider Xero has nabbed one of the world's largest consumer banks as a data partner. Wells Fargo is to be part of the Xero ecosystem. Xero is also pushing ahead with two-way communication with banks. And banks will get access to Xero data to allow them to lend based on SME cash flow and other key metrics, rather than just relying on the owners residential property.
In New York the benchmark UST 10yr yield fell again today, to 1.71%. Germany's 10-year bond yield also fell, and to a record low, amid a surge in demand for the safest fixed-income assets.
The oil price is a little higher with the US benchmark just over US$50/barrel and the Brent benchmark just over US$51/barrel. That is the first time in nearly a year that the oil price has settled above US$50.
The gold price is unchanged at US$1,243/oz.
And finally, the NZ dollar will start today against the greenback at 69.7 US¢ and its highest level in over a month, it is at 93.6 AU¢, and at 61.4 euro cents. The TWI-5 index is now at 72.8.
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 ».
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21 Comments
Oil traders and refiners are like Real Estate agents , they have a vested interest in high prices .
Just like land for housing , there is no shortage of oil on the plant .
The reality is that the world is awash with oil , and American fracking is now responsible for half of its output , and America now produces more than it needs.
There is also over production in Saudi, Iran, Iraq, Kuwait and potentially Libya .
This does include Russia , Venezuela , Australia , Nigeria and Angola all of whom are currently producing less than they are capable of extracting
Boatman, You are mistaken if think the sludge that the US are fracking out of shale is comparable to the crude that comes out of KSA et al. The US rig count is now less than 50% of what it was 12 months ago and as shale plays require constant drilling as they decline at a high rate then watch this space.
The one thing the US shale output surge did prove is how volitile the oil price can be, I fully expect the price to osciillate wildly in the coming years as "oversupply" (and this can be only the matter of a few million barrels per day) suppresses the price long enough for shale and bitumen extraction to self-destruct then flourish again as supply falls.
The current spike is probably due to the Fort McMurray fire (which is still out of control BTW)
Three of the four largest Australian lenders are now facing court action for allegedly trying to profit from tampering with the bank-bill swap rate -- the local equivalent of Libor that’s also known as BBSW. The regulator, which has been investigating the setting of the swap rate since mid 2012, has already lodged similar actions against Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. Read more
Where's the public release of coherent regulator logic dispelling the notion that it couldn't happen here?
And yet we are more than prepared to jump to the task of publicaly challenging China at the risk of damaging the relationship between ourselves and the most serious buyer of our export stocks.
China should explain its island building program in the South China Sea or it will continue to fuel insecurity among countries whose economies depend on free trade, including smaller nations many miles away, New Zealand Defence Minister Gerry Brownlee said. Read more
Who needs export income when you may go hybrid with you hard earned...
Hybrids are sold on the illusion of a "risk free" yield. The Westpac notes have a 6.9 per cent yield, for instance, and that's all people care to know. The fact that it is a fully paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured note that yields 6.9 per cent is an inconvenience that no one dares to question, and that's the Achilles heel. No one really understands them.
http://m.smh.com.au/money/investing/traps-behind-the-hybrid-issue-offer…
The burning of fossil fuels has already resulted in disastrous consequences, and the picture looks bleaker by the day. The recent small rise in oil prices will not alter any of the disastrous trends.
Daily CO2 June 6, 2016: 407.84 ppm; June 6, 2015: 402.99 ppm; up 4.85 ppm (versus recent average of 2.11 ppm per annum).
And Arctic ice volume set a new record low for May, paralleling the record low ice cover previously reported for 2016.
Truthie "misses" quite a bit of raw data though you would have to admit. Like a punter that only tells you about his winners. Ignores Greenland SMB, Arctic sea ice volume, Antarctica sea ice, IPCC summaries on flooding, droughts... "contradict ingrained beliefs " I 'spose.
Greenland SMB well above the '90-'13 mean. Not such a "disastrous trend".
http://www.dmi.dk/uploads/tx_dmidatastore/webservice/b/m/s/d/e/accumula…
Or the Southern Hemisphere sea ice anomaly tracking along at +5% per decade in the satellite era. (note the link automatically goes to Arctic sea ice anomaly for some reason - have to click on the Antarctica tab).
https://nsidc.org/data/seaice_index/
Arctic sea ice volume above non El Nino 2012 - didn't disapppear then isn't going to disappper now.
http://ocean.dmi.dk/arctic/icethickness/images/FullSize_CICE_combine_th…
Heat going out of El Nino and sat era data reverting to inter glacial warming mean. Tracking along at .13 degrees per decade - remarkably similar to pre WW2 when antro CO2 was a fraction of what it is now...
http://images.remss.com/msu/msu_time_series.html
Typical 'profile' shooting yourself in the foot comment. 'Ignores Greenland SMB, Arctic sea ice volume.'
At 10:24am Wednesday:
Arctic Death Spiral – another record:
Average volume for May lowest ever at 20,991 km³.
http://haveland.com/share/arctic-death-spiral.jpg
Averages for May:
2007 23,078
2008 24,102
2009 23,851
2010 22,181
2011 21,108
2012 21,677
2013 21,839
2014 21,878
2015 23,000
2016 20,991
Volume 'profile', VOLUME.
As always, all you can ever manage is outdated, irrelevant commentary, day after day.
I guess you must be some kind of masochist and enjoy making a fool of yourself.
Or perhaps you are a member of the New Zealand Climate Science Coalition that got torn to shreds here:
http://thedailyblog.co.nz/2016/06/07/nz-hits-400ppm-climate-denial-vs-c…
The "death spiral" that isn't showing on the Danish Met chart - you did look at it didn't you - or the Washing Uni PIOMAS data from source. Remains to be seen if it will get below '12 on the PIOMAS chart. I note you are all quiet on the Greenland SMB, southern hemishere sea ice anomaly. What is the southern hemisphere anomaly - a "life spiral"? Try harder Truthie and ease your self off crack pot doomster websites.
Note: black line is above the red line - even with an El Nino year. Even a "fool" can see that... What was it the other day you were saying about insults and debate?
http://ocean.dmi.dk/arctic/icethickness/images/FullSize_CICE_combine_th…
http://psc.apl.uw.edu/wordpress/wp-content/uploads/schweiger/ice_volume…
We have already discussed the fact that higher ocean temperatures result in greater evaporation, which results in higher atmospheric moisture loading, and that can result in greater snowfall and a temporary increases in the thickness of land-based ice sheets.
Thus, a temporary increase in snow or ice depth is frequently a symptom of ocean warming yet is interpreted by deniers of general warming who need to clutch at straws as indicative of cooling when it is not. I see no value in going over that old ground yet again.
One minor problem with your "higher ocean temperatures" equals more snow explanation is, for Antarctica at least, the Southern Ocean is cooling. As it the air temperature. So you can forget warming ocean in Antarctic making more snow for the time being. Given this clanger I can see why you avoid mentioning Antarctica now.
I guess you can fall back on your 'temporary" weasel word when predictions don't pan out.
The UEA CRU predicted snow being a rare exciting event by now so funny how it is being pushed as a saviour for sea ice. Those grant troughing climate scientists and their predictions snapped up by click bait media and a gullible horde of hand wringers.
BTW the way I am not a 'denier' of general warming in fact I am a full supporter of it. I know an inter glacial when I see one.
"Our study tries to address one of the most mysterious problems of recent historical climate change in the region because, in contrast to the strong global warming trend, we’ve seen persistent cooling in the Southern Ocean and sea ice expansion,” said Yavor Kostov, PhD graduate and lead author on the study to be published in the journal Climate Dynamics."
Ocean temps
http://oceans.mit.edu/news/featured-stories/southern-ocean-cooling-in-a…
Air temps
http://data.remss.com/msu/graphics/TLT/plots/RSS_TS_channel_TLT_Souther…
The burning of fossil fuels has already resulted in disastrous consequences
That statement is not "Just raw data" as you suggest.
Non maths, non science trained people can't abide by data and graphs
If this is true then why he is posting his pure raw data here?
Besides which, yesterday Afewknowthetruth posted what he suggested was *proof* from NASA that we are beyond the point of no return, implying nothing can be done to stop the inevitable. In which event, either he is a hypocrite for not believing the stuff he is telling others to believe - or - he is hell bent on rubbing everyones noses in the inevitable, in which case he is a sad and bitter person.
1. We could stop making everything that matters worse at an ever faster rate. .
2. We could make preparations for the inevitable rise in sea level and inevitable termination of present economic-social arrangements.
Apparently many (most?) people would prefer to lose everything they have and die prematurely in a rather unpleasant manner (or have that happen to their children/grandchildren) than change their thinking.
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