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US household net worth up strongly; ECB trims stimulus; China trade grows; Henry frustrated at extended inaction in Australia; UST 10yr yield at 2.39%; oil up, gold down; NZ$1 = 71.7 US¢, TWI-5 = 77.6

US household net worth up strongly; ECB trims stimulus; China trade grows; Henry frustrated at extended inaction in Australia; UST 10yr yield at 2.39%; oil up, gold down; NZ$1 = 71.7 US¢, TWI-5 = 77.6

Here's my summary of the key events overnight that affect New Zealand, with news the ECB has cut back on its stimulus program.

But first, the net worth of American households increased in the September quarter to US$90.2 tln, a +7% annualised rise from the June quarter as equity markets and house prices both rose together. Household borrowing rose at a +4.0% annual rate, down from a +4.3% growth rate in the second quarter of 2016. Net worth at this level puts it at about 50% more than global GDP. This is why the American consumer is central to the health of the global economy.

In Europe, the ECB trimmed back its asset buying program by €20 bln per month to the new level of €60 bln per month in a surprise move overnight. However, it promised extended stimulus and dismissed any talk of tapering the program away. It doesn't see inflation rising to even +1% in any of its forecasts, and it doesn't see growth rising to +2% any time soon either. This is despite increasing money supply by about +5%,

China turned in some somewhat surprising trade data today. Exports were up almost +6%, while imports were up +13%, both numbers in yuan. So some of this was currency related. In a US dollar benchmark, exports only eked out a small rise, but it was their first raise since March. Imports were up +6.7%. Both beat analysts forecasts, especially the import data. Their trade surplus fell to US$44.6 bln in November.

On trade, maybe we shouldn't assume the TPP is dead yet. It seems the US president-elect is staffing his cabinet with supporters of the trade deal. Apparently you can say anything to get elected these days, and then do something quite different when you do. And your supporters don't seem to care.

The ex-head of the Australian Treasury is getting very frustrated with the decision making of elected politicians - or more precisely the non-decision-making. Public policy is slipping into a "fiscal mess" in Australia, he said, and there is an urgent need for bipartisan approaches to some major problems in the lucky country.

In New York, the UST 10yr yield is back up to 2.39%.

Oil prices are higher today too, now just over US$51 for the US benchmark, while the Brent benchmark is now just over US$54 a barrel.

The gold price is down today however and now at US$1,170/oz.

The New Zealand dollar is up at 71.7 US¢. On the cross rates it is at 96.3 AU¢, and against the euro up at 67.5 euro cents. The NZ TWI-5 index is up to 77.6, its highest in a month.

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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10 Comments

Welcome to a wasted 8 years in NZ, or last leader spent that time ?
"The ex-head of the Australian Treasury is getting very frustrated with the decision making of elected politicians - or more precisely the non-decision-making"

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Also the DJIA is making records - 19609

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In Europe, the ECB trimmed back its asset buying program by €20 bln per month to the new level of €60 bln per month in a surprise move overnight. However, it promised extended stimulus and dismissed any talk of tapering the program away.

Hmmm......

There is a vast array of processes and complexities starting with money itself that can and has intruded into the mix of turning what is supposed to be stimulus into fruitful recovery. The character of interest rates as they actually are is one of those, if not the biggest one. Low interest rates may not have been so “stimulative” as they were made out to be, especially where the yield curve and embedded time value, the most essential elements of modern finance, shriveled so far into unrecognizable bearishness. Curves matter, but really they have always mattered it’s just that policymakers are for the first time starting to see why. Read more

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This is an interesting story, and I am acquainted with one of the offenders. I probably can't say much here, but if you read between the lines you may see that the case doesn't capture all the corruption, either in quantity, offenders, or duration.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…
http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11686…

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..just following the lead set by our govt, be it education providers/visa fraud, foreign trusts, foreign ownership, corrupt cash inflows... lack of compliance with money laundering rules. Thanks JK, you have been awesome.

http://www.interest.co.nz/business/85142/financial-markets-authority-st…

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WallSt training paid off

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Sometimes a guilty plea isn't what it seems, it turns the spotlight off rather than on while giving the watch dog a false sense of accomplishment.

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It would be interesting to get a brief synopsis of who Trump has appointed and what their stance is on key issues issues .

The key elements would be :-

Foreign Trade
Defence
Foreign Policy
Local ( internal ) commerce and industry policy
Law and Order w.r.t. drugs
Immigration and the 20 million illegals
and ;
The plan for making American Great again , because I would prefer a strong , free, democratic country in pole position rather than a lying, cheating , murderous Communist Dictatorship that terrorizes and arrests dissenting journalists , and gets rid of , arrests or eliminates any opponents

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The info is out there, very easy to look.

One comment I saw was, one appointee was considered to racist to be considerd a federal judge is now in the top spot.

Lying? cheating? murderous? I recall them machine gunning children with 30mm cannon from an apache attack helicopter, hard to see much worse than that. But of wait they were not white were they. You are a fool IMHO if you think the US is in any way interested in anyone else but itself and then only a subset of itself.

Crashing democratically elected Governments to install puppet dictatorships that torture people? same thing really its just done by proxy.

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Underlying theme to the appointments so far is extremist zealots and grossly unqualified big donors, and conflicts of interest.  One of the more disquieting aspects is attempts to undermine constitutional safeguards in order to install recently-retired generals in interior roles with jurisdiction over citizens. 

Really, I think they've just successfully installed a spectacularly corrupt kleptocracy.  Congratulations, USA.

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