Here's my summary of the key events overnight that affect New Zealand, with news equity markets on Wall Street are -1.5% lower today.
But first we have some important data from the US Census Bureau. American household incomes jumped in 2015, delivering the first increase in eight years, with the largest gains in the bottom fifth of earners. The overall +5.2% jump was the largest since they began releasing this data nearly 50 years ago. This is not the usual (selective) negative - and election - narrative, but it does confirm other separate survey data of rising incomes.
In China, a slew of data points reported late yesterday - from factory output to retail sales - showed rebounding economic activity in China in August after a wobbly few months. And it appears all this is being underpinned by a strong resurgence of investment spending especially by state owned enterprises. That represents a setback in their plans to rebalance to a consumer economy. The falloff in foreign investment seems pretty dramatic and keeps the overall data low. It seems the current costs of the 'rebalancing' policy are not something they want to bear.
China's plans to become self-sufficient in key agriculture products has prompted the US to take it to the WTO, accusing Beijing of rigging farm trade markets. No small irony here for New Zealanders. Still, its election season in the US.
Eurozone consumer sentiment bounced back from the post-Brexit lows. While the German components were a disappointment, the overall region saw growing optimism in this closely-watched survey.
In New York the UST 10yr yield is higher again today and now at 1.73%.
The oil price has slipped sharply in today's trading, with the US benchmark price now just under US$45 a barrel, while the Brent benchmark just over US$47 a barrel. Global oil demand growth is slowing at a faster pace than initially predicted, according to the latest IEA Oil Market Report for September.
The gold price is lower too, but less dramatically so, now just under US$1,320/oz.
The New Zealand dollar opens lower as well on a stronger US dollar. It is now at 72.6 US¢, 97.2 AU¢ and 64.6 euro cents. The TWI index is now at 76.1.
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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13 Comments
This is not the usual (selective) negative - and election - narrative, but it does confirm other separate survey data of rising incomes.
Hmmmmm....
From the IEA report:
The result has been a slump in oil demand growth from a robust 1.4 mb/d in the second quarter to a two-year low of 0.8mb/d in the third. Even with a modest weather-related uptick forecast for the end of the year, oil demand growth in 2016 will struggle to get above 1.3mb/d. Refiners are clearly losing their appetite for more crude oil. During the fourth quarter, they are expected to process only 0.1 mb/d more crude than a year ago.
Our latest numbers provide some clues as to why. Recent pillars of demand growth China and India are wobbling. After more than a year with oil hovering around $50/bbl, the stimulus from cheaper fuel is fading. Economic worries in developing countries havent [SIC] helped either. Unexpected gains in Europe have vanished, while momentum in the US has slowed dramatically. Read more
well done all those big milk companies that rushed to china to set up farms, did they not think they would learn how it is done then copy there IP on mass. gee ask the car companies how that went and how there court cases are thrown out by the Chinese judicial system
http://www.dailymail.co.uk/news/article-3157040/China-s-mega-farm-100-0…
http://www.wsj.com/articles/SB10001424052970203721704577156312307541098
https://www.fonterra.com/global/en/about/our+locations/china/our+farms+…
The contributory visa charge of just under $50 000 meets only a fraction of the fiscal costs for the annual intake of roughly 7200 contributory parents. And an additional 1500 parents make a minimal contribution. Overall, the cumulated lifetime fiscal costs (in net present value terms) of a parent visa holder in 2015-16 is estimated to be between $335 000 and $410 000 per adult, which ultimately must be met by the Australian community. On this basis, the net liability to the Australian community of providing assistance to these 8700 parents over their lifetime ranges between $2.6 and $3.2 billion in present value terms. Given that there is a new inflow each year, the accumulated taxpayer liabilities become very large over time. This is a high cost for a relatively small group.
Ultimately, every dollar spent on one social program must require either additional taxes or forgone government expenditure in other areas. It seems unlikely that parent visas meet the usual standards of proven need, in contrast to areas such as mental health, homelessness or, in the context of immigration, the support of immigrants through the humanitarian stream, and foreign aid.
http://www.pc.gov.au/inquiries/completed/migrant-intake/report/migrant-…
http://www.abc.net.au/news/2016-09-13/family-reunions-australian-migrat…
I'm sure our lot would never undertake a report like that, be a waste of money since Chon Kee knows all there is to know about it and, besides, he wouldn't act if there was a problem 'cause it might make housing more affordable; or something.
There was an article in this weekends Sunday Star about an Auckland housing developer targeting this market. Many of his homes are designed to accommodate both sets of Parents/Grandparents to reportedly huge demand.
http://www.stuff.co.nz/life-style/home-property/84125069/new-homes-in-a…
But also this (if it means what I think it means)?:
Productivity Commision:
We recommend that you:
a agree to the inquiry selection process set out in Appendix 1
Agree/disagree
b agree that Commission’s second tranche of inquiries be selected on the degree that
they:
• are relatively uncontroversial given the desire to establish broad political support for the Commission
http://www.treasury.govt.nz/publications/informationreleases/productivi…
What happened about the Chinese steel dumping and quality problems. Has that all just been swept under the carpet? Now they're dicking with our agricultural markets and we're turning a blind eye to laundering money into our property markets.
Whose interests is our Dear Leader favouring; them or us?
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