Here's our summary of key events over the weekend that affect New Zealand, with news China has relaxed its term deposit interest rate caps.
But first in the US, politics is hurting consumer sentiment. The University of Michigan’s consumer sentiment index fell in April to a reading of 97.8, down from 101.4 in March. Analysts expected a reading of 101 so this is a noteable drop. Getting the blame were fears of a trade war, and fears of rising interest rates.
A US Fed board member has expressed concern over the growing American fiscal deficits, saying recently passed tax cuts and spending increases are raising risks that authorities won’t have a full tool kit to counter the next downturn, a 'certainty' says Bill Gates.
And a drought in key US states is forcing more cattle on to feedlots and into slaughterhouses, putting extreme downward pressure on beef prices. Given the size of the US cattle markets, this can't be a good thing for international prices.
In China, they reported a surprising trade deficit of nearly nearly -US$5 bln in March, a turnaround from a surplus of +US$33.5 bln in February. This is the first monthly deficit since February 2017. China’s imports rose +14% year-on-year in March, while its exports dropped -3%.
And the crackdown on shadow banking is weighing on credit growth in China. That adds to uncertainties facing their economy already dealing with trade tensions with the US. Data out the weekend shows that Chinese banks extended ¥1.12 tln in net new yuan loans in March, and under analysts’ expectations. But that is an improvement from February’s much weaker-than-expected ¥839.3 bln.
China has also relaxed the ceiling on bank term deposits interest rates in a new financial sector reform move. But it is retaining rate caps for other types of deposits.
Freight rates are set to rise for New Zealand as a result of climate change policies adopted at the end of last week. Slow steaming by ships is one of the outcomes from the new global agreement. New ship technologies required will also had billions to ship owners costs. All this will add up to higher freight rates for countries far away from markets.
The Australian stock exchange has virtually stopped allowing mainland Chinese companies to list on their exchange over concerns of poor transparency and bad corporate governance. This comes after a string of serious issues from such companies. The ASX is even moving to clamp down on those that remain listed, delisting some. Mainland Chinese companies are now seen as cowboys, disrespectful of laws and regulations.
The UST 10yr yield ended the week down at 2.82% (-1 bp). The US 2-10 rate curve is now under +50 bps and that is its lowest since before the GFC. The Chinese 10yr is at 3.74% (unchanged) while the New Zealand equivalent is at 2.84% (+3 bps). Neither have 2-10 rate curves moving lower like the Americans do.
Gold is at US$1,345/oz in New York, up +US$9 on Friday.
Oil prices have inched ahead and are still just over US$67/bbl and the Brent benchmark just over US$72.50/bbl. JPMorgan reckons it could hit US$80 during the Syrian crisis. The North American rig count moved even higher last week.
The Kiwi dollar ended the week up at 73.6 USc. On the cross rates we are at 94.8 AUc and 59.6 euro cents. That puts the TWI-5 at 74.7 and still near the top of its 2018 range.
And the Trump's US Treasury again resisted a formal opportunity to designate China a currency manipulator. Even though it faulted Beijing for doing too little to open its economy and retained China on a formal monitoring list for possibly receiving the designation in the future, it won't call them a manipulator, or impose the sanctions that would come with it.
Bitcoin is back in favour and flirting with US$8,000. It is now at US$8,301 which is a rise of +8% from the last time we looked on Saturday.
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34 Comments
I'm surprised the Syrian crisis hasn't caused more alarm in the markets. Perhaps people can see it for the charade that it is. Millions of dollars of missiles launched into empty buildings, probably with a warning beforehand for the Syrians about which targets had been chosen.
Further sanctions on Russia are more of a worry. The West is intent on poking the Russian bear it seems. A dangerous game one would have thought. The Russians aren't exactly global thinkers and you could even consider Russia to be a world of its own. Putin has already articulated that he cannot see the point of a world where Russia no longer exists. Think about what that means for a moment.
Not sure what's going on. The Skripal drama is now pretty obviously not the work of the Russians and the Syrian chemical attacks accusations are the weakest reasons I have seen to go to war with deliberate refusals to even investigate it properly.. The US military high command is deciding to launch attacks on the basis of social media noise. Trump will react with military violence with no more evidence than what he has seen on the telly that night. He seems to be genuinely emotional and overwrought about something that likely never happened. I would have thought launching an attack without evidence constituted a war crime. It would certainly be a crime if you attacked your neighbour because an enemy of your neighbour said they were abusing the kids.
These are very interesting times. The Western propaganda is so incredibly childish and weak. I don't know, maybe it's just me and a few others, but it seems to me we are in a very dangerous situation.
Hopefully it's all just "theatre".
Are you sure you haven't been reading too much Russian propaganda? I doubt if those who know them better are in any doubts. Know any Poles, Hungarians, or Czechs you could ask?
Would not dare to ask Poles as their government has different ideas than people.
You must be reading propaganda though.....
Maybe but it just seems to defy common sense. Assad for example is an incredibly calm and smart leader. His successful effort to stay alive and the loyalty and bravery of his soldiers is testament to this. Why would he launch a chemical attack in a mopping up operation?
We all know as well that in a house fire all sorts of toxic chemicals are released. Any bombardment will release all sorts of chemicals too. It needs to be properly investigated before violence is initiated. What is the need to rush into things?
Firstly "The Skripal drama is now pretty obviously not the work of the Russians" Based on what exactly? Your gut feel, or do you have some information that no-one else has? As to your second comment - i suggest that Assad and for that matter Putin, like so many national leaders (including and especially Trump, and dont forget Bush) thoroughly believe they'll never be held accountable for their actions. They believe they can hide behind their national borders, their armies (manned by fervent political supporters, because the neutrals and otherwise leaning have been forced out) and never be taken to the Hague to account for their crimes against the world. with some justification apparently.
Calling Assad calm and smart.He has killed 500k of his own people.He is a dictator and his allies Iran and Russia are led by thugs.Trump compared to these thugs should be called calm and smart.
Good one - that's why Yeltsin was good (for the West) and Putin is bad.
The West also interfered with the Russian elections to get Yeltsin elected and proudly admitted to it.
That's why neutrality on this site (country) is a must.
The empire is about to burst.
How we will suffer is the matter of time and history will tell.
I agree, looks like theatre to me, i suspect it was staged but what the Israel did, probably not. If we want to know the truth then I suspect we need to ask Israel .
“We gave categorical assurances to Gorbachev back when the Soviet Union existed that if a united Germany was able to stay in NATO, NATO would not be moved eastward.” —US Ambassador in Moscow, 1987-1991, Jack Matlock[i
Russia has undertaken to retaliate. That could now well be more boots on the ground in Syria and a big push to clear out any and all resistance to Assad. Iran will be fully supportive. The missile attack will be justification for this. Probably the strategy all along. The Russian economy is weak, very weak. Just about entirely dependent on energy export to the EU. California, New York,Texas each have a larger economy than Russia, the USA could hurt Russia by exporting energy to the EU themselves, hence Trump lifting coal mining one supposes. Bit of a chequerboard isn’t it.
Yep all coming back to economics
Cattle on feed in the USA have been climbing at around !0% pa. The party had to end, cheap feed a rebuilt herd, lots of beef in Sth America and it's a perfect storm, how ever for some reason the funds playing in the market decided to keep it the price up as long as they could. 1st of April was the day MacDonald's went local beef only, so have many other burger outlets like Burger King. Big cow kill started and yet the dairy herd is growing still, lots of young animals coming into herds.
http://beef2live.com/images/668/images/1b28b8f6.png
pork too
https://new.attenbabler.com/wp-content/uploads/2018/04/Livestock-Meat-T…
@ the ostriches Profile and Ex Expat. The latter even accused me of providing false news. The truth is that NASA have published results of their recent research that show increases in global sea levels HAVE become exponential. However, they use the words "increasing incrementally" obviously for those readers that do not understand exponents. https://climate.nasa.gov/news/2680/new-study-finds-sea-level-rise-accel…
Yep. We better get used to these storms.
On Gates - he's hardly Nostradamus. Every market rises and falls.
Not sure about his optimism for the USA's future.
Yep. We better get used to these storms.
On Gates - he's hardly Nostradamus. Every market rises and falls.
Not sure about his optimism for the USA's future.
That doesn't mean it's caused by CO2, this assumption is always used to try to justify a TAX. Why can't people just tell the truth , we have a problem and we need to solve it?
Your full of it Didge. Put up the paper showing exponential sea level rise. Incremental sea level rise happens during an inter-glacial. We live in benign times no matter how much you hand wringers fret. I'm all for building resilience but to suggest anything unusual is happening at present is ignorant of history or alarmist clap trap chasing research grants or tax revenue.
"During the Last Glacial Maximum 26–19 thousand years ago (ka), a vast ice sheet stretched over North America [Clark et al., 2009]. In subsequent millennia, as climate warmed and this ice sheet decayed, large volumes of meltwater flooded to the oceans [Tarasov and Peltier, 2006; Wickert, 2016]. This period, known as the “last deglaciation,” included episodes of abrupt climate change, such as the Bølling warming, when Northern Hemisphere temperatures increased by 4–5°C in just a few decades [Lea et al., 2003; Buizert et al., 2014], coinciding with a 12–22 m sea level rise in less than 340 years (Meltwater Pulse 1a (MWP1a)) [Deschamps et al., 2012]."
Note "4–5°C [warming] in just a few decades" vs 0.24 degrees C warming in the past 30 years of the satellite record. It is warming slower now than pre WW2 when we had 1/7 of the industrial output we have today.
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2016GL071849
https://www.nsstc.uah.edu/climate/2018/march2018/GTR_March2018.pdf
I do not waste time arguing with ostriches. I trust the many thinking members of this site understand the implications of what is happening NOW.
https://climate.nasa.gov/news/2680/new-study-finds-sea-level-rise-accel…
https://climate.nasa.gov/news/2700/arctic-wintertime-sea-ice-extent-is-…
So no exponential sea level rise then. Just a bunch of hand wringing. Sea ice, yawn, plenty of papers showing ice free periods since the last ice age - if you cared to do a modicum of research.
"Astrid Lyså says that such old beach formations require that the sea all the way to the North Pole was periodically ice free for a long time.
”This stands in sharp contrast to the present-day situation where only ridges piled up by pack ice are being formed,” she says.
However, the scientists are very careful about drawing parallels with the present-day trend in the Arctic Ocean where the cover of sea ice seems to be decreasing.
"Changes that took place 6000-7000 years ago were controlled by other climatic forces than those which seem to dominate today,” Astrid Lyså believes."
https://www.sciencedaily.com/releases/2008/10/081020095850.htm
Full of what? No full of answers evidently :)
Andrew have you seen this super sarcastic and also very funny video of Robert Newman on the History of Oil.
It not only shows the interference of the west (US and UK) called "bringing democracy to the Middle East", but also that Iraq was really where the first shots were fired in WWI.
Absolutely worth a watch.
https://www.youtube.com/watch?v=2DCwafIntj0
All in one piece -- if you have not seen it, this is a treat -- the most painless chiropractor for your socio-political backbone known to the Western World.
Thanks I will have look later.
Thanks I will have look tonight, perhaps you are interested n what Im watching at present
https://www.youtube.com/watch?time_continue=975&v=jcnd3usdNxo
Roger will undoubtedly give reason for continued NZD strength this morning. Personally have taken short EUR/CAD and long CADGDP positions this morning.Bullies and stupidity exist everywhere. Imagine if China were to exert undue influence over New Zealand and we upset them or defer OIO decisions. I note the extended Chinese embassy wall down Great South Rd is almost complete.
Nuclear powered freighters arriving soon - the only way to meet agreed shipping emissions reductions and cater for world growth in trade.
They will be very welcome in the City of Sails - now there's and idea !
Assad is winning the war against a collection of religious based nutjobs and various acronyms. And the West is upset about it. You really have to wonder why the West is unhappy with that.
I don't believe the chemical attack story at all. That's because the Syrian Government and the Russians have predicted exactly this fake news event for weeks now. And sure enough that's exactly what the media did. There is actually no motivation for the Syrian Government to use chemicals when they had already won the battle in the Gouta enclave.
Just as the government finally clears JAI out of Douma this story pops up. In the next week or two the Syrian Government will move in the ISIS controlled area in South Damascus. Wait and observe the western storm about that. Personally I have no issue with ISIS headchoppers being eliminated.
There was a story from early this century that is illustrative. The US were showing the media a site in Iraq which was supposedly a chemical weapons plant. But some guy popped up and said "No. It's a dairy plant" when asked why he thought that he said. "I'm a New Zealander and I build dairy plants" and "I built that one".
Very easy to predict fake news,then you carry out the fake news now it is no longer fake news.
Looking at your previous comment about 500k of dead Syrian people I assume that your logically thinking and rational person.
So think:
let say that outside NZ some bad people want to make NZ looks bad (whatever reason why - land, oil, gas, water, religion); than they start talking to some (Maori, Chinese, etc.) activists about how greatly they suffer from hands of other (colonialists) in NZ; then start giving them weapons with some training; show the points to arrange demonstration at first; then more serious clashes; then you may end up with 500k on New Zealanders dead; these initial bad people will called activists as rebels but we call them terrorist. The rest is just pure propaganda.....
The problem with US propaganda (MSM, government; deep state, etc.) that they never got the real war on their soil so it is easy for them to bomb other people with any (real or not) pretexts.
On the top of this the current environment as MSM, social media etc. are centralised and quick for a spectacle
that looks good in TV. So you have it - gas attacks looks good, it is scary and serves purpose - to whom - just think ......who benefits in all these situations: countries, politicians,
If you don't know what is about it is always about money and/or power.
What happened right after the second direct U.S.-missiles invasion of Syria, which had occurred on the night of April 13th, could turn out to have momentous implications
https://www.zerohedge.com/news/2018-04-15/syria-what-just-happened
And :
China: "The Arrogant US Has A Record Of Launching Wars On Deceptive Grounds"
https://www.zerohedge.com/news/2018-04-15/china-arrogant-us-has-record-…
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