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

Facebook and Microsoft hit back at Trump's latest anti-immigrant move; Whole milk powder prices fall; North Korean jitters hit Wall Street; RBA upbeat on wage growth; UST 10yr yield sinks to 2.08%; oil and gold up; NZ$1 = 72.4 US¢, TWI-5 = 74.4

Facebook and Microsoft hit back at Trump's latest anti-immigrant move; Whole milk powder prices fall; North Korean jitters hit Wall Street; RBA upbeat on wage growth; UST 10yr yield sinks to 2.08%; oil and gold up; NZ$1 = 72.4 US¢, TWI-5 = 74.4

Here's my wrap of what’s happened around the world overnight.

Dairy prices rose by 0.3% - less than expected - at the latest fortnightly GlobalDairyTrade auction. While the prices of cheese, butter and milk fat were up, powders were down. The price of New Zealand’s main export - whole milk powder - fell by 1.6% to US$3,100 per metric tonne. AgriHQ says there wasn’t much WMP bought at this event, even though there were a few more winning bidders from North Asia. It says WMP volumes are expected to increase over the next few auctions, reducing urgency from bidders to buy.

Tech giants are slamming US President Donald Trump for scrapping a programme that prevents immigrants, who were illegally brought to the US as children, from being deported. The Deferred Action for Childhood Arrivals (DACA) programme was introduced by former President Barack Obama and affects around 800,000 people, who are now mostly in their 20s. Executives at Facebook, Amazon, Apple, HP, Uber and Tesla are among those who have voiced their opposition to Trump’s move.

The Reserve Bank of Australia sees faster wage growth and interest rate rises on the horizon. Keeping its cash rate on hold, Governor Philip Lowe says the central bank hasn’t sought to “overly engineer or fine tune” an economic recovery. He says that while globalisation, competition from new technologies and economic uncertainty will keep depressing wages for "a while yet", he doesn’t believe stagnant wage growth is a "permanent state of affairs".

A North Korean ambassador to the United Nations says the recent “self-defence” measures by his country are a “gift package addressed to none other than US”. The US has urged the Security Council to impose the “strongest possible” sanctions against North Korea. However Russia says new sanctions are “a little premature”.

The situation in North Korea is causing jitters among investors. Wall Street’s three main indexes sank by around 1% after the first day of trading since North Korea conducted its sixth nuclear test over the weekend (Monday was a public holiday in the US).

In New York, the UST 10yr yield has fallen 9bps overnight to 2.08%. ANZ economists report these broke lower as Trump tweeted Japan and South Korea could buy more sophisticated weapons from the US.

The price of crude oil is up to US$49 a barrel. The Brent benchmark has also risen to US$53.

Gold has jumped to US$1,337/oz.

The New Zealand dollar has regained some ground today. It's at 72.4 US cents, 90.5 Australian cents and 60.7 euro cents. The TWI-5 index is up to 74.4.

If you want to catch up with all the changes from 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.

23 Comments

Re the RBA and wages, "tell 'em they're dreamin"
https://www.macrobusiness.com.au/wp-content/uploads/2017/05/Budget-wage…

Next move in Australian interest rates will surely be another cut (rightly or wrongly).

Up
0

Agree. They were spouting the same rhetoric several years ago. They're bound by the relative strength of USD just as we are.

Up
0

Great chart.

Up
0

The Reserve Bank of Australia sees faster wage growth and interest rate rises on the horizon. Keeping its cash rate on hold,

Actually the real wages growth for the quarter was close to 0.1%. The propaganda machine is up to all kinds of mischief at the moment. The following discovery from Macrobusiness shows the shenanigans at play at the AFR.

https://www.macrobusiness.com.au/2017/09/yesterdays-wages-boom-goes-bus…

Up
0

Listen to Hermione Ardern flounder and evade on land tax. I guess telling people you are transparent is a like telling people you are a lady - if you have to do it you aren't. From 5:00.

http://www.radionz.co.nz/audio/player?audio_id=201857303

Does she even want the job?

"Ms Ardern says the pressure and anxiety has ballooned since she took over as second in command, adding that it would be unmanageable as leader.

"I hate letting people down. I hate feeling like I'm not doing the job as well as I should. I've got a pretty big weight of responsibility right now; I can't imagine doing much more than that," she says.

"When you're a bit of an anxious person, and you constantly worry about things, there comes a point where certain jobs are just really bad for you."

http://www.newshub.co.nz/home/politics/2017/06/poll-jacinda-ardern-s-po…

Up
0

Yea, who wants a leader that appears to have some sort of emotional compassion and genuine ambition to to the job to the best of their ability.

I'd much rather Bill and his sense of entitlement.
It's only logical that a sense of entitlement is the single largest motivator of performance.

Up
0

A couple of things I stated to my father yesterday.

"You have lived most of your life in a post war period, now you are living in a pre-war period".

"North Korea is a sovereign nation, what place does any other nation have in interfering with their defense policy?"

Up
0

A comment from yesterday's article on NK it was pointed out that NKs Kim could sell nukes on the international terrorist market to raise funds. Do you want that? Their defence policy is one of attack. America and South Korea have been trying to get them to sign a peace treaty and declare the war over for more than 50 years. Plus the fact that they have brutalised their own people, understand what they will do to others given the chance. Are you happy with that? A head in the sand stance, blaming the US is neither reasonable nor practical.

Up
0

It is a pretty flawed argument that firing missiles across some other countries sovereign air space is a defence requirement.

It is not North Korea's defence any intelligent person should be concerned about.

Up
0

...the UST 10yr yield has fallen 9bps overnight to 2.08%... OMG. Jenee, could we have a chart on UST please

Up
0

Source: New York Times

Up
0

It’s hard not to put all emphasis on missile tests and other serious forms of sabre rattling. Even doing so, as the bond market may be doing right now, however, misses the underlying. Everything at the moment traces back to mid-March, which in hindsight was a very eventful month in full far away from the Korean peninsula. Read more

Up
0

Often when the US is negotiating it declares that "all options are on the table" which is basically a threat of lethal military action. This will obviously get the other party's back up. Imagine if you conducted business like this? It's like dealing with a madman. It's no wonder that NK is developing a nuclear strike capability. Wouldn't it be better to insist that military action is not an option and instead stress the benefits of openness and trade? I feel that the Cuba situation would have worked out much better if the US had just treated them like a normal country. They seem to have no issue with China and trade even though a Chinese military official stated recently they could easily wipe out all the US Western seaboard cities and would do it if pressed.

Up
0

Putin spells it out...........

Using the missile and nuclear defense threats as a means to deter, according to Putin, is how the North avoids the fate of former Iraqi leader Saddam Hussein. The Russian leader, a former head of his country’s intelligence services, also said that sanctions, like those put in place against the North’s economy last month by the United Nations Security Council, are “useless and ineffective.”

“Saddam Hussein rejected the production of weapons of mass destruction, but even under that pretense, he was destroyed and members of his family were killed," Putin said at the BRICs summit, which brings together Brazil, India, China and South Africa.

Putin added: "The country was demolished and Saddam Hussein was hanged. Everyone knows that and everyone in North Korea knows that."

Up
0

so what is his explanation for NKs actions prior to Iraq? NK has been doing what it is doing for long before Iraq became an issue.

Up
0

Probably the fact that the war never technically ended. It is obvious for a country like NK that nuclear weapons would be useful for regime survival. It is a wonder that Saddam and Qaddafi didn't do more to protect themselves. Regardless what goes on in NK is not NZ's concern. I was once all for this type of intervention but after Iraq and Afghanistan with the loss of many young Kiwis for what amounted to making the situation much much worse I am now totally opposed to such wars. The US just isn't competent enough to conduct such missions..

Up
0

Don't disagree, but what is a realistic solution? People espouse diplomacy, but the Kim family have abused and flouted diplomacy for decades. the comment after yours suggests a cause for their position is Hiroshima, but in that case at it is now the enemy (Hiroshima - Japan) and now (NK) were/are the aggressors. Perhaps the biggest error being made here is the same one that was made in Vietnam, a lack of understanding of the culture of the NK regime. I suggest that the commentators who are saying the Kim regime are doing what they are doing solely to stay in power is correct. Therefore rationality doesn't come into. accept that they are, by our standards at least, irrational and you have an explanation. After all Kim did remove his uncle by putting him in front of a 23 mm antiaircraft canon and pulled the trigger. So then the question is are we safe when an irrational person heads a country with a nuclear arsenal? In America there are a few limitations that Trump must deal with (but even their controls assume any leader is essentially rational), but what controls are there on Kim. It could well be the only effective control may be a weapon aimed specifically at him. Hi rhetoric to his own population may well compel him to action. At the moment he is detonating nukes inside his own borders, deep under ground. Once he has perfected the design, and has a few up his sleeve what is there to stop him detonating a few elsewhere, or making them available to international terrorist groups for some easy cash?

Up
0

The fact that NK would be nuked back by USA who has many more nukes than them is why NK would not use a nuke against anyone else. It would mean instant death to their regime, which is what they are trying to protect.

I would suggest the risk of nukes falling into the wrong hands is already quite high just down to the fact that the major world powers have so many of them sitting all around the place... That is more of a risk than NK selling one of the very few they might have... http://www.express.co.uk/news/world/741871/Every-nuclear-bomb-location-…

Up
0

Hiroshima ....

Up
0

Obama in 2012 drew his "red line in the sand" if Assad used chemical weapons in Syria. Chemical weapons were used and Obama did nothing, within the next 18mths Putin annexed Crimea, then then invaded the Ukraine and ISIS made their large military moves. Key is if you threaten to use force and give an ultimatum you have to be prepared to back it up, the US is now viewed as unwilling to use military force.

Up
0

The Big Lie today is this: that the reason for the economic sanctions against Russia, is that ‘Putin’ or Russia ‘stole’ or ‘conquered’ or ‘seized’ the Crimea region of Ukraine. The Big Truth, about the matter, is that US President Obama conquered Ukraine itself (all of it), via a February 2014 CIA coup that he had secretly started planning by no later than 2011, which on 20 February 2014 culminated with the violent overthrow of the democratically elected President of Ukraine, Yanukovych, who had won 90% of the votes in the far-eastern Donbass area of Ukraine, and 75% of the votes in the far-southern Crimea area of Ukraine, both of which intensely pro-Yanukovych regions refused to be ruled by the Obama-appointed rulers — the hard-right, fascist and rabidly anti-Russian, team that the Obama regime imposed upon Ukraine, after Obama’s agent Victoria Nuland told Obama’s Ambassador to Ukraine on 4 February 2014, that «Yats» (Arseniy Yatenyuk), a hard-right and even racist anti-Russian Ukrainian politician, was to become appointed to run the country as soon as the coup would be over, which happened 23 days later (and Yatsenyuk did then receive the appointment and establish very hard-right anti-Russian policies — including massacres of ethnic Russians in Ukraine). Read more

Up
0

It might be historically more accurate to say Russia 'took back' the Crimea.

Up
0

A Republican-led House of Representatives, Senate and White House may witness the permanent downgrade of the US federal government’s credit rating by one of the three largest ratings services.

If the US government fails to raise the “debt ceiling,” which limits how much the government is able to borrow, and subsequently misses a debt payment, its outstanding rating would not only be lowered by Moody’s Investor Service, it might stay downgraded for good, CNBC reports. Read more

Up
0