sign up log in
Want to go ad-free? Find out how, here.

Dairy prices rise +3.5% to 18 mth high; US labour costs rise quicker; Italy prepares bank bailout; NZ school scores lag; UST 10yr yield at 2.39%; oil and gold down; NZ$1 = 71.1 US¢, TWI-5 = 76.7

Dairy prices rise +3.5% to 18 mth high; US labour costs rise quicker; Italy prepares bank bailout; NZ school scores lag; UST 10yr yield at 2.39%; oil and gold down; NZ$1 = 71.1 US¢, TWI-5 = 76.7

Here's my summary of the key events overnight that affect New Zealand, with news labour costs are rising faster in the US than originally reported.

But first, this morning's dairy auction brought slightly higher prices. Overall they were up +3.5% (+3.2% in New Zealand dollars), and the WMP price was up +4.9%. This is now a string of four consecutive rises, and seven out of the past eight auctions have brought price gains. Since July, dairy prices have risen +56%, and prices are now back to where they were in June 2014.

In the US, there has been a sharp increase in labour productivity. Not only is output rising, the cost of labour grew more quickly than previously thought in the second and third quarters of 2016, the latest sign that Americans’ wages are picking up. Such costs grew at a +0.7% rate in July through September, more than double the initial estimate of a +0.3% gain. Economists had expected the new figure to show a +0.2% increase.

In Italy, Bank Monte del Paschi of Siena is being readied for a state bailout, following the collapse of reform proposals by voters. A kicked can is being picked up by taxpayers, who seem happy about it based on their anti-reform vote.

The latest OECD PISA data shows that New Zealand students are performing worse at all income levels, achievement levels and across government, integrated and private schools. We are still ahead of the OECD average for science, maths and reading, but we have fallen relatively since 2006. On the equity side, we have changed little since 2006. Basically, New Zealand students are two years behind top performer Singapore.

In Australia, they will report their Q3 GDP growth data today - and some economists are bracing for a fall. The New Zealand GDP data is not due until December 22 and is late because of the Wellington earthquake's impact on Statistics NZ. Yesterday, the Reserve Bank of Australia held its policy rate at 1.5% as a global commodity upswing eases the impact of a weaker economy at home.

In New York, the UST 10yr yield is a little higher today is now at 2.39%.

Oil prices are lower today, down about US$1/barrel, now at just under US$51 for the US benchmark, while the Brent benchmark is now just under US$54 a barrel. Despite their restraint agreement, the latest data shows most major exporters pumping more, not less, especially Russia.

The gold price is lower too, down to US$1,169/oz, giving back yesterday's late rally.

The New Zealand dollar will start today at about the same level it was this time yesterday, at 71.1 US¢. On the cross rates it is at 95.4 AU¢, and against the euro up at 66.1 euro cents. The NZ TWI-5 index is marginally lower at 76.7.

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

Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
End of day UTC
Source: CoinDesk

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.

7 Comments

tick tick, interest rates to rise BOOM

Up
0

When it was announced in Israeli newpapers the their kids grades in science and maths had fallen it was described as a NATIONAL EMERGENCY..
Don't expect the same in NZ.
Sadly the only NATIONAL EMERGENCY we will ever have is when the All Blacks lose.

Up
0

Innovation yet to peak. "Rather than killing the U.S. shale industry, the ensuing two-year price war made shale a stronger rival, even in the current low-price environment.

In Dunn County, North Dakota, there are around 2,000 square miles where the cost to produce Bakken shale is $15 a barrel and falling."

http://fingfx.thomsonreuters.com/gfx/rngs/OPEC-MEETING/010030SC1P5/USA-…

Up
0

Trump. (this comment doesn't fit here, but whatever) Trump tweets that replacement for Air force one at $4 billion US dollars is out of line.
The commentators, media are shocked and horrified he would say such a thing. Almost a scandalous tweet in their view. Which says a lot about the commentators, and the beltway elite.
If they were asked what would the voters think. Methinks there is a disconnect between the elite, reality and the voters.

Up
0

And I see the crazy guy could possibly appoint a scientist to head the EPA. What is he thinking?! "If appointed and approved by Congress, Van der Vaart would be the first PhD scientist to head EPA."

Read more: http://dailycaller.com/2016/12/04/trump-could-appoint-someone-totally-u…

Up
0

He has also given China a messge.
Beijing doesn't a have say in who the US president talks to.

Up
0

The Italian Bank bailout is unsurprising with 20% of loans being at risk. There's a lot of wishful thinking on recovering those loans but in reality they are generating zero cash flow and recoveries on default will be low (as usual).

Up
0