Here's my summary of the key events over the weekend that affect New Zealand, with news of some global economic slowdowns.
Firstly, in China growth in their manufacturing sector slowed faster than expected in April as producer price inflation cooled and Beijing's clampdown on the financial sector weighed on demand. Growth in their service sector also slowed somewhat but it is still expanding strongly at a similar level we have seen for over a year.
But that slowdown is nowhere near the sudden one we have seen in the US. Their economy stumbled during the first months of the year. Consumers reined in spending despite a rise in confidence and despite a rise in equity markets. GDP grew at just a +0.7% annual rate in the first quarter, the slowest pace of expansion in three years.
In Europe, inflation is back up to +1.9% and near the policy targets. Not only were energy prices up, both food and services prices were also rising in this official survey. These levels were higher than markets were expecting.
In Australia, the latest filing by Google there shows revenue up strongly to A$1.14 bln in 2016 from A$498 mln in 2015 after Australia tightened its anti-avoidance laws. However, declared profits only rose to A$16 mln from A$2.8 mln in 2015, the accounts show. Those same accounts reveal that the company has had a new tax demand lodged by the ATO, and Google says it will fight it.
And staying in Australia, APRA says it is keeping an eye on rising risks in lending for commercial property projects, an area the regulator says has "traditionally been the cause of stress in the banking system". Their review found "clear evidence of an erosion of standards due to competitive pressures - for example, of lenders justifying a particular underwriting decision not on their own risk appetite and policies, but based on what they understood to be the criteria being applied by a competitor".
In New York, the UST 10yr yield will start the week unchanged at 2.29%.
Oil prices are still slipping lower at now just over US$49 for the US benchmark, while the Brent benchmark is now just over US$52 a barrel. The number of new rigs being brought back into production in the US continues it's strong upward growth; these are now back to mid 2015 levels.
The gold price is up marginally at US$1,266/oz.
The New Zealand dollar will open unchanged at 68.7 USc. On the cross rates the Kiwi dollar is at 91.7 AU¢ and against the euro at 63 euro cents. The NZ TWI-5 index is now at 73.4.
If you want to catch up with all the 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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10 Comments
How the "Mighty" have fallen.
Is this an indication, or are the blinkers still on?..
Is this a slow down, a right turn, a full stop. ?. Or is it fake news, ? Or is it ...just trendy.
Is it the start of the Canadian Rockies as suggested...or just a Singapore Sling.?
http://www.zerohedge.com/news/2017-04-30/russian-oligarch-suffers-50-lo…
If its true, now is not a good time for any of the Australian banks to relax their own underwriting policies due to competitive pressures. Acquisition of personal bonuses might be the reason behind this abhorrent development. If so, HR management heads should be the first to roll.
Of course , the first week of any month brings us the Barfoot and DGZ interpretation of statistics. I note that ANZ ,property focus for April shows a 9.3 percent price fall in Auckland on a rolling 3 month stratified measure. I take all property stats with large grains of salt, but are amused that the ANZ numbers were barely reported.
Cowpat, now first off I'm not picking on you, but I am intrigued by your quoted figures for Auckland. I have scoured the ANZ report and cannot find a figure of -9.3%. I feel there must be some sort of mistake. In the report I do see mention of -9%.
On a 3-month annualised basis,nationwide prices are running at 2.5%, which is up from 2.1% in February but down from over 23% over mid-2016. Auckland prices are running at -9% on the same measure.
However when you look at the associated graph you see Auckland at +9%. Now maybe I'm reading it wrong but all the other figures look right with the graph except Auckland. Perhaps someone can explain this anomaly?
Near the end of the report it has a table showing an annualised percentage change for Auckland of +8.4%.
Here is the report:
Do you have a link or explanation for your figures?
As Yvil suggests , possibly a typo, most likely a premonition. Actually I do not know where the 0.3 % came from, although I was writing from memory. Annualised and 3month , rolling or 3m/3m will all come up with different numbers. The -9 % relates to Auckland 3m/3m annualised, the last 3 month Auckland is -0.2 %. The annualised number is still up given the levels that it reached in 2016. Median prices may be rising on other metrics, but that is simple skewing of property type, confirmed by the fall in investor numbers. The stratified index , is showing that across all property types, the prices are falling.
Firstly it needs to be noted the ANZ report is for March, it couldn't be for April, it's the 1st of May today and the last 2 April days were over the weekend, the guys at ANZ are not that good.
In the table on page 14, it shows Auckland up 8.4% from 12 months ago and -0.7% over the last 3 months
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