Here's our summary of key economic events overnight that affect New Zealand, with news that the run to the end of the quarter is proving to be a subdued affair.
First up today, the American retail impulse is not in great shape. Compared with a year ago, retail sales were up only +2.8% last week on a same-store basis. This isn't anywhere near strong enough to cover inflation, so retail sales volumes are shrinking - and probably have done for the past month.
However, on an actual basis, the American merchandise trade deficit shrank in February, coming in at -US$71.5 bln for the month and down from the year-ago level of -US$84 bln. That is because their exports rose +5.4% year-on-year and imports fell -1.9% on the same basis.
The Richmond Fed's factory survey in the mid-Atlantic states recorded improvements in March in both employment and new orders, and an overall modest improvement in business conditions. Although still elevated, the costs component fell sharply in March. Overall, this is an interesting contrast to the Texas survey we noted yesterday.
The latest survey of American consumer confidence is the widely-watched one from the Conference Board, and that shows a modest rise in March. But there is no sign in here that inflationary expectations are receding.
In China, a high-ranking trade official has been charged with taking bribes. She pleaded guilty when charged.
But Chinese exports of construction equipment are still going strong, in fact now exceeding domestic sales. Exports were up +34% in February from a year ago.
In France, financial prosecutors raided several of France’s biggest banks, including Société Générale, BNP Paribas, HSBC and Natixis, as part of a investigation into what authorities say is one of Europe’s biggest tax thefts involving taxes on dividend payments. German authorities were also involved. Although it is a scheme devised by their clients, the accusation is that banks also profited because they handled the transactions.
In Australia, retail sales were up in a marginal way in February, barely beating the very lame expectations analysts had. Clearly this sector is cooling now.
The UST 10yr yield starts today at 3.54%, up +2 bps from yesterday. The UST 2-10 rate curve is little-changed at -49 bps. Their 1-5 curve inversion is also little-changed -89 bps. But their 30 day-10yr curve is very much less inverted at -56 bps. The Australian ten year bond is up another +7 bps at 3.35%. The China Govt ten year bond is little-changed at 2.88%. And the New Zealand Govt ten year is starting today up at 4.12%. That is a +5 bps rise.
Wall Street is softish, with the S&P500 tracking a -0.5% fall in late Tuesday trade. Overnight, European markets were more positive, but only up a mere +0.1% across the board. Yesterday Tokyo ended its Tuesday session up +0.2%. Hong Kong recovered +1.1%, but Shanghai ended down -0.2%. The ASX200 ended up a good +1.0%, and the NZX50 was up even more, up +1.4% in its Tuesday trade.
The price of gold will open today at US$1970/oz and up +US$14 from this time yesterday.
And oil prices start today up nearly +US$1.50 from yesterday at just over US$73.50/bbl in the US. The international Brent price is now just over US$78.50/bbl.
The Kiwi dollar is up +½c against the USD and now at 62.5 USc. Against the Aussie we are little-changed at 93.2 AUc. Against the euro we are firm at 57.6 euro cents. That means the TWI-5 is now up at 70.3 with a +30 bps daily rise.
The bitcoin price is lower again today, now at US$26,886 and down another -0.9% from this time yesterday. Volatility over the past 24 hours has been modest at +/-1.0%. The US charged Bankman-Fried overnight with bribing Chinese officials.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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54 Comments
ECB and other clueless global central bankers like those at the Fed keep talking about inflation risks and rate hikes when banks had already started to cut back on loans. Even HH lending has come down already. Link
Early retirement has forced up inflation, says Andrew Bailey
Bank of England Governor warns that the shrinking workforce has pushed prices and interest rates higher
I wonder what our retail sales will be for March adjusted for season and inflation? I bought a new tennis racquet and shoes so did my bit to prop up the economy.
Can't fault your approach - it has to be a net gain.
Pleased to see you slept with the light on PDK, keep it up.
Trying to put more of a spin on things
Pleased to be of service
as you know, I take a dim view of umpire-building....
Given PDK's aversion to spending energy, I'd expect him to "cut" the balls rather than topspin them. (BTW, I'm also a keen tennis player)
Everyones heading to pickleball...
Groan! @David Chaston can we please close the comments section again!! :)
Its good to see that people can play nicely despite their differences ;)
Imagine that , a mixed doubles match , PDK partnered with a giant trannie called Lola ...
... we'd soon see who's got the biggest bouncy balls ...
would it be mixed doubles if they partnered?
Stuart Nash & Marama Davidson at the other side of the net ... neither of them have anything useful to do these days , serves them right ...
East Coast farmland crumbles after carbon group takes over
The Government's Emissions Trading Scheme incentivises the planting of pine forest. But a company looking to cash in on the scheme has left a farm on the East Coast prone to significant erosion within months of taking over. Aaron Smale reports.
Carbon credit. It isn't about saving the planet it is all about money. I noted the players...or investors. same ol same ol.. Not surprised.
Carbon credit. It isn't about saving the planet it is all about money. I noted the players...or investors. same ol same ol.. Not surprised.
Agreed. For these reasons, I can understand why the Greens appear to be unhinged of late. Their utopian visions of how it should be are being diluted. Seems like a collection of grifters involved in the carbon business.
"Their utopian visions of how it should be are being diluted." Reality is a harsh critic, and I'd suggest "diluted" is the wrong word; "shredded" is in my view more appropriate.
I have never been able to understand or accept the Greens perspective of how we could achieve what is needed. For all their claims of prescience, they seem utterly ignorant of human psychology. Worse - in some respects they seem to have been captured by some of the 'green washing' BS that is being produced. At some levels a careful consideration of what they want is to drive the species back to the stone age ( a retread of the McGillicuddy Serious Party?), but they are willing to accept the BS 'green washing' suggestions of the vested interests (in the status quo) which will achieve nothing and may make things worse. They have no pragmatic plan to transition NZ into a lower or zero carbon future that will support all of the population, that can be critically analysed and supported. Is the only basis of their platform fear mongering?
Yep. The Greens (political party) are not very practical or pragmatic people (IMO). But if you look at the Maori leaders, businesspeople (if you can attach that label to Jevan Goulter), and the post-political troughers identified in this article, you realize that the Greens are not the only clowns in the circus.
As to the other parties vested interests dominate their platforms and are more or less obvious. Racist politics and greed don't really build a basis for high expectations. The circus is in town!
Growthist industrialism is the shortest route to the stone age once vital resources have been ideologically squandered and the waste produced has left the planet unable to support complex societies. As much as the green party has lost direction, it is still shoulders above the rest of the offerings on environmental awareness.
Greens looking more dystopian these days. As a centre left, tree hugger myself I am sad to say that National look like a safer pair of hands given the current economic, social and environmental challenges.
That doesn't make sense.
On any level.
They all reflect us - and we, collectively, are all about short-term consumption. That is compounded by many of us being beholden to the system; we need the income which relies on continued sprawl or whatever. National are, if anything, worse. But none are about real sustainability, and that which is unsustainable, will inevitably cease.
The only NZ Party which addressed what is needed, was the Values Party - it's 1975 Manifesto would stand unaltered, today. Jeanette Fitzsimons was the last vestige of that, and tried to stem the Davidson-et-al tide at an AGM, as far as I could tell. And failed. What the Greens are now, is socialist (which is a human construct, unsustainable if based on growth) with a token 'climate justice' (whatever that means) aside. And no understanding of the Limits to Growth, overshoot, physics/energy, depletion.....
Let's hope David doesn't quash this discussion :)
National were making progress with farmers in their last term. A lot of tree planting and fencing was taking place. I would prefer to see a party that takes some practical steps and takes the majority with them, to a party of activists who create a lot of noise, make no progress and turn most people off.
I wish the Greens would change their name to the Identity Politics Party. I want to see meaningful steps to improve biodiversity and reduce pollution, the Greens are driving moderate people away from the environmental message. The term Green gets associated with radical left, when the environment should be important to everyone on the left and right.
Really good comment PDK. People are still stuck in their persistent paradigms and haven't yet accepted that change has to happen and how to accomodate it.
Stuff ran an article a day or so back from a Professor suggesting that NZ needed to revisit it's nuclear free policy with respect to power, but there it doesn't seem to have stirred much debate. Indeed there is more about the Aussie purchase of nuke subs from the US, and the PM saying that NZ's policy will not change. Nonsensical of course as nuclear power and nuclear weapons are as far apart as boats and motor cars.
Or, we could just degrow and not need massive industrial complexity fuelling a biosphere killing ideology?
Taking into account human psychology, how would you achieve that?
Outlaw the advertising industry for a start.
What a bunch of bottom feeders. If there is a teat to be suckled, these guys will be on it.
Despised crypto XRP on a tear at the moment and up 53% YTD. Why is this important? The company who bought XRP to life has been in a court battle with the SEC for the past yew years to determine whether or not XRP is a security (securities must be registered with the SEC, much like a stock needs to be registered before it is offered to the public). This has huge implications for "non-BTC cryptos" as mosy are seen as securities by the SEC and are not registered as such (the ol' rat poison is deemed to be a commodity, not a security).
So while the legislature is independent of U.S. govt agencies, there will be huge pressure for the courts to rule against XRP. With the judge close to releasing summary judgement, there seems to be strong buying, particularly out of Asia.
Never a dull moment.
And we wonder why Unemployment isn't rising. It can't! We've denuded ourselves, all of us, of a replacement working population, and have been doing so for decades. And as those of the last working sector expansion - the Baby Boomers - move into retirement/a grave, wages are going to rocket to try to attract replacement staff. And we know what's coming in tandem with rocketing wages, don't we.
The average number of children born to a woman in her reproductive years — is now 0.78.... 2.1 rate (is the rate) that experts say is needed for a country to maintain a stable population without migration.
https://www.npr.org/2023/03/19/1163341684/south-korea-fertility-rate
We will be a better place with a smaller population
Just wait for the $hit fight though on which regions/districts and their infrastructure should be abandoned. I'd argue infrastructure is being abandoned by stealth these days as it is. But some hard decisions will need to be made.
Imagine slowly figuring out that your place of abode is to be sacrificed for a larger group of people. They'd be better off of NZTA were to compulsorily acquire their land for a road.
https://www.stuff.co.nz/national/300829857/the-idyllic-community-being-…
Infrastructure abandoned? So increasing our population by 25% over the last decade or so was a retrograde step for NZ infrastructure? Perhaps Simon Bridges plans for another 5 million will result in a change of outcome? And the 5 million after that, and......
I think the way TFR is calculated masks changing generational preferences. If we had a population of two women, aged 24 and 25, and the woman aged 25 gave birth this year, then the AFR for women aged 25 is 1 and the TFR for the population is 1. If next year, the woman who was 24 and is now 25 doesn't give birth, the AFR for women aged 25 falls to 0 and the TFR for the population is 0. That woman might plan to have a child at 28, but that won't be reflected in the TFR until she gets to 28 and has a child. You can see how across an entire population, if younger generations planned to have children later in life than prior generations, we would have a falling TFR until that generation has their children.
Falling house prices.....
https://www.newshub.co.nz/home/money/2023/03/economist-warns-national-h…
Listened. Bloxham said he was expecting falls of up to 25% and prices had already fallen 18%.
The media interpreted this as 18% + a further 25%.
So people can breath a sigh of relief. Only a little way to go (according to Bloxham).
Whilst it's true that the local work force is shrinking, it seems you have forgotten about the overseas workforce returning to NZ. The current low unemployment, is due to the lockdowns, which reduced foreign workers to almost nil. Immigration is now quickly picking up again and this will alleviate the worker shortage in the second half of 2023.
It is only a worker shortage to the business community who want to suppress wages.
It is the purposeful inflation of the labour force to suppress wages and decrease the standards of living for most people to the rest of us.
Does immigration suppress wages or is it low productivity from the workforce? Surely Australia has immigration but also higher wages…..
Some pieces which make the case that immigration suppresses wages.
https://www.unz.com/runz/raising-american-wages-by-raising-american-wag…
https://www.unz.com/article/ron-unz-on-the-minimum-wage-law/
https://www.unz.com/article/cape-cod-proving-george-borjas-right-reduce…
https://www.unz.com/article/national-data-unprecedented-real-wages-surg…
Sources are provided in each of these articles.
this will alleviate the worker shortage in the second half of 2023
Nineteen nurses have entered NZ via fast-tracked residency | RNZ - this is also the case in many other areas of higher-skill shortages.
FYI Staff turnover in the health and aged care sector is nearly 15%. At this pace, we're going backwards because the tens of thousands of migrants coming in alongside the 19 nurses are putting a lot more demand pressure on our health system.
a replacement working population
Covid border lockdown aside, NZ has been growing its working-age population for almost an entire decade, but just not bringing enough genuine skills.
This means more wage competition at the bottom, more people to shelter, more mouths to feed but not enough skills to maintain a steady supply of local goods and services in NZ (higher inflation). The period of record-high inflation from 2014 to 2019 coincided with non-tradable CPI running between 2.5 to 4% consistently.
INZ claims to identify 'high-skill' but brings in Chefs and tourist guides. There is only one way of identifying 'genuine skill' and that is what we are willing to pay. INZ should auction its Visas - the immigrants may or may not be genuinely skilled but at least the govt will receive income.
It is because no one has actually OIA'd the data to match which companies acquire visas for what roles and salaries.
I guarantee you the rhetoric of teachers, nurses, doctors etc is an utter lie and these professions make a relatively small minority of the plantation labour imported to suppress wages and consume buffalo wild wings.
I have looked at the data. There’s a decent number of healthcare professionals and carers, but a huge number of chefs, cooks, waiters, builders, carpenters.
Agreed. The auction should remove the financial incentive for unscrupulous employers to exploit migration channels for wage suppression and the excess proceeds can be put into infrastructure funding.
David Seymour has suggested something along these lines in his migration policy.
"But their 30 day-10yr curve is very much less inverted at +56 bps"
Do you mean -56 bps?
I do.
.
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