Here's our summary of key economic events overnight that affect New Zealand, with news open and fair availability of information is subject to wild distortions in two of the world's largest economies.
Americans are at their mid-term polls in an election that seems to turn on vast amounts of self-interested billionaire money and admitted-Russian interference - and for some reason these influences seem to be working in battle-ground contests. It seems likely a grim result for proper democracy is about to be rewarded, and again in the face of the popular vote. Gerrymandering wins again.
These results, and the American CPI data for October which is due on Friday (NZT) are the next big market movers.
Their rise in consumer credit was slightly less than anticipated in September, but the miss was minor and indicates a sensible expansion, not anything to be concerned about. For one thing, it rose less than inflation, so isn't revealing any consumer debt stress.
And American retail sales chugged on last week, up +7.6% from the same week a year ago on a same-store basis.
In China, they are celebrating reporters and news media "loyal to the party", so they too are under the influence of powerful forces. Different to the US, but still malign. It is difficult to then work out the true state of the Chinese economy.
In Taiwan, compared with the same month last year, exports fell in October, but only marginally and by far less than was expected. And there was a sharpish rise in imports there, so their trade surplus halved in the month.
In Europe, retail sales eased higher (on a 'real', inflation-adjusted basis) in September and by the amount expected. This was an improvement over the prior month.
In Australia, the widely-watched NAB business confidence survey fell in October, taking it to its lowest reading since December 2021 and leaving it below the long-run average. It comes amid growing concerns over rising interest rates and a gloomy global outlook.
The Westpac-Melbourne Institute Index of Consumer Sentiment for Australia fell in November to its lowest level since April 2020 as rising interest rates and surging inflation weighed on family finances and the economy. November’s reading also remained at contractionary levels for the ninth straight month.
The UST 10yr yield started today at 4.14% and down -7 bps from this time yesterday. The UST 2-10 rate curve is little-changed at -53 bps. Their 1-5 curve is more inverted at -44 bps. And their 30 day-10yr curve is marginally steeper at +60 bps. The Australian ten year bond is unchanged at 3.97%. The China Govt ten year bond is little-changed at 2.72%. And the New Zealand Govt ten year will start today up +11 bps at 4.72%.
In New York, Wall Street has opened higher with the S&P500 up +1.2% late in their Tuesday session. Overnight, European markets finished in a wide range with London flat and Frankfurt up +1.2%. Yesterday Tokyo ended its Monday session up another +1.3%, but Hong Kong slipped -0.2%, and Shanghai ended down -0.4%. The ASX200 closed up +0.4% but the NZX50 fell in a building sell-off to end down -1.2%.
The price of gold will open today at US$1717/oz. This is up a sharpish +US$39 from this time yesterday.
And oil prices start today -US$2 lower than this time yesterday at just on US$90/bbl in the US while the international Brent price is just on US$96.50/bbl.
The Kiwi dollar will open today at 60 USc and up +¾c since this time yesterday. Against the Australian dollar we have stayed firm at 91.6 AUc. Against the euro we are down marginally at 59.2 euro cents. That all means our TWI-5 starts today at 69.9 and +40 bps higher than this time yesterday.
The bitcoin price is now at US$20,480 and down -1.1% since this time yesterday. However, volatility over the past 24 hours has been very high at just on +/- 4.3% with some wild swings from more market instability.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
65 Comments
Captain Ardern's climate leadership fantasy. Sorry about those farms and export receipts chaps.
"China's CO2 emissions of 80bn tonnes from 2013 to 2020 is higher than Britain’s 78bn over 220 years
Between 1750 and 2020, the UK emitted 78 billion tonnes of carbon dioxide into the atmosphere, compared with China’s emissions of 80 billion tonnes since 2013.
The UK has indicated it is open to paying “climate change reparations” to climate vulnerable countries and will discuss the issue at the ongoing Cop27 summit.
However, China is unlikely to be party to an arrangement because it still considers itself a developing country."
https://www.telegraph.co.uk/environment/2022/11/07/china-pumps-pollutio…
Somebody is a bit antsy. Not hard to figure why.
China's pollution is, of course, proportionately ours (every time we buy something made there).
But everything is made in China.
Aye, they say nowadays, even the Chinese are made in China.
they're not too shabby at virus generation either
Under the tutelage of Uncle Tony.
Great, our methane emissions and CO2 from driers are proportionatly someone elses.
Most of the milk powder we produce is exported.
That's not how it works.
It's always the west's / white man's fault.
No need to make it about race sugar puff, the west has and does consume more per capita so we're the ones that need to change our behaviour. You're happy to slag of the slumlords for exploiting the disadvantaged, well on an international level we're all slumlords exploiting the developing world.
@powerdownkiwi
Not so much as you might imagine. Per capita carbon emissions for China are 6.9 tonnes. Adjusted for exports it only drops to 6.2 tonnes per person - higher than the global average. There's lots of data out there about embedded carbon emissions, interesting to look into.
EU is trying to disengage with China trade.
China cancels opening ceremony address of EU Council president at major trade show because he was going to "call for reduced trade dependency on China" What kind of halfwit says he wants LESS trade with the host country at the launch of a trade expo? Link
A Chinese one.
profile,
Here, I think we are pretty much in agreement. With our total emissions representing some 0.17% of global emissions, what we do or don't do is irrelevant in global terms. If we shut down the entire economy tomorrow, the global CO2 dial would not move.
Here's just one example of what is happening elsewhere. The small, poor country of Guyana is about to become a significant oil producer. Exxon has made over 20 discoveries there since 2015 and the recoverable oil is estimated at some 11bn barrels. Is it going to be produced? Of course. Is that the very last discovery? Almost certainly not.
I have little doubt that now, energy security will 'trump' climate change. I am sure that the move to renewables will also intensify, as will the mining of the many metals and minerals needed for the transition.
Don't be a chump, it's emissions per capita that are relevant. At this we fail dismally. We're consuming way way more than our fair share.
"Everyone else has to do their part, but I am too important to be inconvenienced. It's the poor who should cut because there are more of them!"
Exactly. F***ING entitlement mentality.
So here in NZ, will the urban population be paying climate change compensation to farmers who lose productive land in storm events due to all their endless driving around in emitting cars etc?
Or will the farmers be paying climate change compensation to the urban folk whenever a flood wipes out or destroys a few houses?
Or does it just balance out?
We have been losing productive land due to storm events forever. The positives of Global Warming, no I mean Climate Change far outweigh any negatives. Forget about the unsustainable renewable industry (just look at the poor Germans) and start drilling here in NZ. As Uncle Donny says, Drill baby drill.
Climate reparations is a ridiculous concept. It’s a perversion of the problem.
Global warming is a long term problem, our challenge is about where we are in the future not where we are now.
While the science is relatively clear on the amount of warming stemming from a rise in C02 the science on the positive/negative consequences is much more uncertain. Some countries like Russia and Canada are expected to be major beneficiaries from a warmer world.
Extreme weather is very complicated and anyone who looks at say the Atlantic hurricane data will see a mixed picture relative to predictions of increases in frequency and ferocity.
Climate reparations is just welfare for poor countries dressed up as a necessary action. It stinks of starting with the outcome you want (poor countries get money) and relable it as climate related.
It annoys me because it hurts the effort to move away from fossil fuels and a technology led process. People see this kind of stuff and they see it for what it is - welfare and a tax on them - and they will resist it.
Any and all money should be invested here in capital, technology and incentives to reduce our emissions. Spend $20M or whatever on replacing coal boilers in schools or something. Actually helps reduce global warming, creates NZ jobs. Win win.
The key sentence: 'they [bonds] have now become cheap enough to offer both attractive carry and the potential for strong capital gains once steep global hikes deliver recessions'.
Deeply inverted yield curves reveal as much.
"About 49% of restaurants were unable to pay their rent this month, up from 36% in September, while 37% of real estate agents couldn’t pay their rent, up from 27% last month, "
https://unusualwhales.com/news/about-37-of-small-businesses-which-betwe…
Well Rome picked up the Greek system of democracy and proceeded to corrupt it into nonexistence. Nothing compared to where the USA is with it now. Heck if each state can’t govern themselves [democratically] how do you expect the federal government to govern them. Alexander Hamilton way back, remarked corruption had been “sewn into the constitution.” And here they all are, snouts at the ready, hoping their chosen party will fill their troughs with gravy. It would be funny if it wasn’t true.
[ RT distorted trolling removed. Don't do it. We are not a channel for troll farms. Ed ]
Townhouses for rent in Auckland have really shot up over the last few weeks. Up to 488 now. Expect the surge higher to continue as a tonne of townhouses are completed in the next 6-7 weeks.
We don't have democracy anymore, haven't done in a long time. The dominant institution in today's society is no longer the state, it's capital, and capital knows no borders. It's one dollar, one vote. Those with money are constantly trying to influence elections all over the world. It's nothing new this time around.
Nothing new. It occurred about 2250 years ago. Julius Caesar amongst others went heavily into debt to buy votes. Only difference then there were no parties. It was basically up to the individual.
#Germany's economic advisory council will recommend govt raise taxes on the wealthy to help finance multi-billion Euro relief packages it has agreed to fight energy crisis. Tax revenues could jump >€1tn as early as 2025. Would be a doubling within 20yrs. https://reuters.com/markets/europe
New statement about energy reserves will be interesting to peruse. One month's supply to be held in NZ - do we even have that capacity? And whoopie - what do we do on day 32?
This is a sign of the times - but will be missed by most who believe that computer-generated digits can ALWAYS be swapped for energy.
Indeed. New energy alliances are being formed and we may not be part off them.
New fossil fuel alliances. Fossil fuels are not the future.
You still need fossil fuels to create the way for the future. PV panels don't grow on trees.
PV panels don't grow on trees.
Technically they do, we just haven't worked out how to use leaves to our advantage yet.
Wouldn't that be great.
Actually, we've figured that out a long time ago when man discovered fire.
For the USA (greatest country in the world), fossil fuels will certainly be the future. Fossil fuels = wealth, higher standard of living, cleaner environment, life expectancy is higher, infant mortality has dropped, a safer climate, just too many positives. Do you actually believe the US has 800 military bases around the world to promote freedom and democracy? No fossil fuels are the future.
In days of old, ie pre computer, when I started out in the early 60s in a trading bank, everything was recorded, and ended up in the general ledger that was balanced daily. It was all there accurate and correct and couldn’t be altered. From what I can see the electronic version of the same process does not provide the same accuracies, accountability or safeguards. Hence the ability to alter history to suit the narrative and excuse oneself from blunders when the truth of the matter percolates and as you suggest it will be interesting to observe the flurry of this sort of activity on “day 32.”
This is why there is so much interest in Blockchain derived technology. It's an immutable ledger.
An immutable ledger would be pretty useless.
Blockchain is essentially a write-ahead / append-only ledger BUT if one controls a majority of the network, history can be rewritten.
Agreed - if you can take control of the Internet then easy nut to crack.
My thought exactly. In NZ We have to start going down this line. A mate of mine in the US told me that he purchased movie theatre tickets recently - and they were sent to him as an NFT. The media here talk about NFTs like jpegs, but it won't be long before all records will be on blockchain.
Over the 17 years I was a bank market trading professional I never witnessed execution confirmation tampering. Mainly because all counterparties had active telephone/keystroke recording operations.
Fair enough and I failed to identify my comment as being more generalised than referencing just banking. My wife worked in London for quite a while for the branch of a Boston Bank and says they were extremely water tight, similar I suggest to your experience. But there are the exceptions of course. Leeson at Barings just one who completely defeated their systems. In NZ same sort of “loopholes” took down Broadbank.
I followed Leeson very carefully since my desk, at the time, executed significant volumes of eurodollar futures hedges on Simex. He had the full backing of Peter Baring, the chairman of Barings Bank, in so much as the margin calls on losing "rogue" trades were paid daily and without delay according to my sources via our local Singapore clearing manager. We were naturally concerned the exchange's integrity might be compromised if that wasn't the case.
The commentary in NZ on the U.S. elections is truly out of touch. Americans are voting today to get rid of the sort of policies pushed by our Labour/Green government, which are having a very damaging effect on NZ. If the current bunch is re-elected in NZ, we will be the next Argentina and even the next Zimbabwe. Anyone with money in NZ who invests and creates jobs will flee to Australia.
Pot/kettle.
No policies - Left or Right - can alter what is happening now. This is the human enterprise coming up against planetary limits. Don't blame 'others'.
Given the deletion upthread, I'm surprised your comment wasn't also deleted.
:)
elmoboy I agree - unfortunately for the American populous the alternative party happens to include a bunch of people who think if you say something it must be true - so hard to say of they will be better off or not - possibly only because the political stalemate will result in no further action for a couple of years
People all around the world are voting incumbent governments out, because they blame them for escalating living costs.
oh puhlease - the Ardern government isn't a Whitlam, Kirk or Muldoon government - the CIA is still our friend. As for Biden, the US is the only G7 economy back to pre-pandemic GDP.
The US will burn (again) if the Repugnants start pushing their socially backward agenda across more of the country.
Not only the US. Expect Europe to burn as well if US support for the Ukrainian liberation falters!
If anything than your comment is out of touch.
Investments into an economy based on renewable energy will create jobs, lower energy costs, increase geopolitical security and improve our odds against climate change.
If we continue on our current path, trillions of assets will be rendered useless in the next 50-70 years and the basis for human life will be greatly diminished.
It is a prospect only the outgoing generation can be supportive of, anything else is masochistic and irrational.
No.
It might 'create jobs', but it won't create buying power, vis-a-vis bits of the planet (goods, services).
It can't 'lower energy costs' - FFS are you new here? Energy underwrites money, 100%. So renewables will underwrite commensurately with their EROEI; SAY 7 to 15% of current activity. One thing it won't be, is 'cheaper'. Who told you than nonsense?
Climate change is not the biggest, not the most immediate, problem facing our overshot species. But I agree, renewables are the future (some of us went there years ago).
Don't measure 'assets' in 'trillions'; it's the mistake economists make, and it's a prima facie one. It's 'pre-committed joules' and 'pre-committed resources'.
This is not correct, they are not voting to get rid of the type of policies proposed by Labour and Greens.
BTC currently pantsing itself. Tripped down to 15K USD range, has bounced back up to $17K USD. ETH down almost 20%.
Interesting.
The FTX - Binance showdown. You might even call it a hostile takeover by CZ. Remember, play with leverage and you stand to get burnt. Capitalism is supposed to be like this.
And the irony is that the gold price takes off on the same day.
That $20k handle seems to be extremely psychologically important for BTC. Any sustained fall from that level is likely to be a big one.
That $20k handle seems to be extremely psychologically important for BTC. Any sustained fall from that level is likely to be a big one.
Still possible for another 85% from here. The reckons from the water coolers from what was discussed at the neigborhood BBQ should include the worse case scenarios. And remember, Kaumatus Orr and Robbo will not be there to protect you.
The next level of support is $12K apparently.
Hopefully the next leg down that I’ve been hanging out for has begun. Maybe not now but I expect it’ll bottom around 12-14k. I stand ready for the sale.
Don't know where you got those figures from? Looking at Binance, the largest exchange in the world, it bottomed at US$17,166.
And thats because the second largest exchange got out played by Binance, who are now going to bail them out.
Great opportunity to grab some more corn at fire sale rates.
Remember. Not your keys Not your corn 😁
If we have another liquidity crunch lkke march 2020 my bottom bet is $US14,000 or there abouts. Otherwise this 20k range is our bottom.
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