Here's our summary of key economic events overnight that affect New Zealand, with news of more evidence and expectations that the "impending recession" might be avoided.
First up today, the IMF has raised its global growth forecast. They say the world's economy is expected to expand by +3% in 2023, slightly higher than the 2.8% seen in their April forecast. However, at that level growth still remains weak by historical standards mainly due to the impact of the central bank policy rate hikes aimed at combating inflation. The say they now expect the US to expand +1.8% (up), China by +5.2% (unchanged), India by +6.1% (up), Japan by +1.4% (up) and the EU by +0.9% (up). Neither Australia nor New Zealand get a mention in this latest update. China is now the key risk to global growth, they say.
The US certainly isn't getting any expansion impetus from bricks & mortar retail sales. They fell again last week for a third week in a row on a same-store basis.
But that may just be that corner of retail sales. The widely-watched Conference Board consumer sentiment survey reported something of a surge in confidence in July, up sharply from June which was also a good rise from May.
And you can see those improvements also in the two Richmond Fed July surveys out overnight, a bit more in the services survey, but also in their factory survey.
If the American tide keeps coming in, maybe the IMF will need to raise their US growth forecast again. They say the Americans are more likely to avoid a recession now.
Notably absent from a raft of Statements from an emergency Politburo meeting in Beijing yesterday has been any confirmation of widely-expected new economic stimulus measures. However, there were announcements about a relaxation of property restrictions, plans to tackle local government hidden debt, and measures to stabilise employment.
But Reuters is reporting that several Chinese steel mills, all state owned and including the world's largest, have received verbal instructions to cap this year's output at the same level as 2022. This will likely cap iron ore demand in the world's top steel market.
Separately in China, President Xi has fired his recently-appointed foreign minister. In the very unusual move, which probably indicates a power struggle in the ministry, he has been replaced by the recently retired Foreign Minister, Wang Yi. The reason allowed to be talked about is an alleged affair with a TV reporter.
China appointed Pan Gongsheng as governor of their central bank, replacing respected Yi Gang who is said to have reached retirement age. These changes at the top in Beijing aren't the only ones.
South Korea said its economy grew more than expected in Q2-2023, a second straight quarterly expansion. This is despite a decline in exports. Now their central bank expected their GDP will grow +1.6% this year from 2022, slightly higher than the IMF's forecast of +1.5%.
In Germany, the widely-watched Ifo Business Climate indicator fell for the third month in a row in July to the lowest level since last November and well below market expectations.
The UST 10yr yield will start today at 3.91% and up +5 bps from this time yesterday. Their key 2-10 yield curve inversion is less at -99 bps. Their 1-5 curve is also less at -122 bps. And their 3 mth-10yr curve is less at -148 bps. The Australian 10 year bond yield is now at 4.06% and up +8 bps from yesterday. The China 10 year bond rate up +5 bps at 2.71% which is an unusually large move for them. The NZ Government 10 year bond rate is up +2 bps from yesterday to 4.67%.
On Wall Street, the S&P500 has opened its Tuesday trade with another +0.5% gain. Overnight, European markets were mixed between -0.2% and +0.2% changes. Yesterday Tokyo ended essentially unchanged. But Hong Kong rose a very sharp +4.1% in Tuesday trade. Shanghai ended up +2.1%, both on expectations of major new Chinese stimulus however. The ASX200 ended its Tuesday session up +0.5% on the same rumours. But the NZX50 fell -0.7% on the day and wiping out the prior day's gains.
The price of gold will start today at US$1962/oz and up +US$3 from yesterday.
And oil prices are up +US$1 at just over US$79.50/bbl in the US. The international Brent price is now at US$83/bbl.
The Kiwi dollar starts today up +¼c at just on 62.2 USc. Against the Aussie we are slightly softer at 91.7 AUc. Against the euro we are up nearly +½c at 56.4 euro cents. That all means the TWI-5 has risen only slightly and to 69.9 which is up +10 bps from this time yesterday.
The bitcoin price has firmed slightly since this time yesterday. It is up +0.8% and now is at US$29,266. Volatility over the past 24 hours has been modest at just over +/- 1.1%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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87 Comments
Unrelated, but can and explain [briefly] why it is not feasible to have a rubbish incinerator between Auckland, Hamilton and Tauranga?
Why are we still reliant on landfill and burning good resources? With the issues around the new landfill being in a forest it would be nice to see some bolder election policies.
Bolder policies from politicians who want to come into power by bribing the public? You are kidding me.
I wonder why politicians are legally allowed to bribe without any consequences?
The country has gone soft, no one is bold enough to have policies with will help in the long term. It takes long term planning and thinking.
These days our politicians plan policies which will keep them in power for next 3 years. 😁😁😁
https://www.who.int/news-room/fact-sheets/detail/dioxins-and-their-effects-on-human-health
Although it's possible to reduce the output of dioxins by burning at very high temp incinerators will still pump them out. They are very persistent and very toxic. They find their way in to milk so putting it in the middle of our milk production area probably not a great idea
Would it be a clean incinerator and double burning etc
On a separate but related issue, Mt Maunganui area is now revealed as high air pollution area with excess deaths caused. Who would have thought such a thing could happen under a Green/Liebour govt
Port of Tga too successful I guess.
Edit: updated
Below the radar:
Everyone thought that EVs would be one perfect solution to climate warming, but now they find these heavier vehicles (because of their heavy batteries), as well as weightier SUVs in general, are not only a stressor on roading causing pot-holes, but are spewing out a disproportionate amount of cancer-causing particulates from their tyre wear.
That would require you to use brakes in an EV, and generally, unless someone cuts in front of me I don't, it could be why there are Tesla owners that get 250,000kms on the original brake pads, as do many Prius drivers.
It generally become an issue because the rotors and backing pads and the adhesive fail before the brake lining wears out, particularly in the places in the world that salt the roads in winter.
Yeah, I'd like to see some actual intelligent, long term thinking applied to one of NZs and humans dirty habits. How about Zero Waste? No organic material going to landfill. Inorganic recycled, or not produced in the first place. Of course the dirty industrialists among us want a dirty money making subsidised option. Might as well just keep burning coal. Also dumb, but more efficient and cleaner that this stupid idea of incentivising waste streams.
Hugh,
I have wondered why we aren't looking at this technology,it takes waste,turns it into cheap,clean hydrogen and apparently no pollutants are expelled.Seems a win/win.
Particularly those land bankers out west Auckland just beyond city boundary. In fact, it is crucial considering the poor quality of roads and already congested traffic, flooding, etc that no more residential development should be permitted out West. Otherwise townplanners will have blood on their hands.
The comment is just "ice melting", not where. Sea ice will mean the sea is warming and some species may struggle to survive. I would also suggest some commercial fishing will push further into polar zones, which will be a bad thing. (I personally believe commercial fishing is killing our oceans). Land based ice though will lead to sea level rise. If the ice melts fast, and this looks possible if not likely, then coastal property will be threatened. A lot of change is on the horizon. It'l take some brave and strong politicians to lead through this.
In the mean time I've got some bottom land going cheap.......
Indeed, this will likely be forced upon us.
We should be on a war footing right now with climate change especially, considering the impacts its bringing us. During times of war, elections are suspended and the strong leader steps up to concentrate on the fight. Think about it just this year, $4b in Auckland at least, $15-20b in East Cape... and we are only halfway through. That's around 8% of GDP already this year... remember all the denier "experts" telling us at most climate change induced weather would cost between 0.5-1% GDP?
The only shining light so far is serious government supported action to reduce our emissions, but that needs to step up significantly too. National's response is "kick the can down the road", what they don't see is the road is quickly getting washed away.
Disagree. Effective democracy needs an informed, active electorate. That's the problem, not the political system. Our most influential means of gathering information at the moment, is a system that relies on making the public less informed, while selling you a sponsored message.
Effective democracy needs an informed, active electorate.
It doesn't, and that wouldn't make much difference.
Case in point: most people know obesity is bad for you. Also, obesity rates are through the roof.
Humans are generally terrible at operating past their own risk/reward impulses.
Coincidentally getting on a push bike would be good for both environment and obesity. Yet spending $700 million a cycle bridge making 100,000+ people a short ride to the city is considered a laughable project while spending $600 million every 3 years on a $5 prescription subsidy so we can throw out more drugs is considered highly sensible.
The inability of people to gather information via literary media is a bigger problem. It was reported back in 2018 that a million New Zealanders had less than the basic literacy skills required to fully participate in society. Yet education policymakers can't get their act together
A famous quote by Ray Bradbury best explains NZ's situation - “You don't have to burn books to destroy a culture. Just get people to stop reading them.”
New data shows Kiwi students are doing worse in maths than they were four years ago with only 42% of Year-8 students meeting curriculum expectations. Even school kids in many so-called third world countries are faring better than this!
You blame the education system, I blame the parents. Unfortunately our system encourages the most motivated people to have no kids and the most lazy to have many. The parents can't even be bothered making their kids breakfast or lunch, I doubt they are reading them stories before bed etc. A loaf of Value Wheatmeal Toast Bread at New World costs $1.59, it isn't due to poverty.
Your line of reasoning still doesn't justify 40% functionally illiterate kids.
A public-funded education system is supposed to break the looming poverty trap in a society by providing decent education to kids whose parents never received one.
Instead, bureaucrats keep messing with school curricula despite plenty of evidence suggesting the conventional ways still produce better outcomes than the s**t-show we've conjured up here.
A public-funded education system is supposed to break the looming poverty trap in a society by providing decent education to kids whose parents never received one.
Is it though? It's core aim is to try and provide an educated populace.
Much of our education resource is bogged down just dealing with the consequences of day to day poverty, in the form of dysfunctional kids. Pretty ambitious to also lump schools with the task of fixing poverty.
If the kids wont try then there isn't much the school can do. The kids don't try because their parents taught them there is no need. Its almost impossible to teach someone who doesn't want to learn.
Its not a poverty trap, its a don't give a crap trap, its almost impossible to fix (unless you force them to give a crap by giving consequences).
Sea level rises are driven by land ice melt and thermal expansion. This means the effect is not linear- as more land ice enters the sea, there is a bigger volume of water to expand. Have a look at the graph Sea level rise - Wikipedia and you'll see the most recent 50mm rise to 40 years and the previous one took 60 years.
Also, from that article: between 1993 and 2018, thermal expansion of water contributed 42% to sea level rise (SLR); melting of temperate glaciers contributed 21%; Greenland contributed 15%; and Antarctica contributed 8%.
The shrinking of NZ's glaciers (and more snow falling as rain) will impact on our hydro lakes - they will fill faster in winter as water enters directly then have reduced flow in the warmer months.
https://nsidc.org/arcticseaicenews/charctic-interactive-sea-ice-graph/
Check out the Antarctic graph!
More likelyhood of marine heatwaves, higher precipitation. Sea ice is a great reflector of solar radiation, when its not there, the dark coloured ocean absorbs the suns rays and heats the seas more.
Going forward with sea temps higher we can expect hurricanes to hit us more frequently as the band they are created in or thrive in expands out from the equator. More January Auckland flood like events, at least more frequently.
But don't worry, profile will tell us everything is OK because he will cherry pick some dodgy evidence and ignore the other 99% of evidence cos it inconveniently disagrees with his false reality.
Less ice shelf in the Artic, higher sea levels, a wetter winter up there or more likely wetter next northern spring and summer?
And we might follow down here? El nino, hotter summer, less ice shelf in Antartica, wetter winter or spring?
my main question - will the winter following the very hot summer be more rainy, or will the higher rainfall come in the spring / summer?
Very hard to predict, too many forces at play to say what it will be like exactly because you are entering into predicting weather.
Its a complex system, all we know for sure is that increased warmth means the air carries more water and there is more energy in the systems (more heat trapped). Even NIWAs predictions using their supercomputer modelling often isn't accurate for weather or seasonal predictions.
Try finding data prior to 1979 and whilst at it, work out why data starts at 1979.
Between 1920 to 1950 Arctic wormed up significantly with glaciers disappearing and collapsing. Cyclical changes in the weather caused the ice to thicken after 1958, and by 1961 there was unanimous consensus that Earth was cooling. Sixty years later, Arctic sea ice still two meters thick – 24,000 km³ spread out over a little more than 12,000,000 km². The polar ice cap had expanded 12% by 1975. Icelandic ports were blocked with ice for the first time in the 20th century.
NSIDC have data going back pre satellite era https://nsidc.org/sites/default/files/images/before-1979-mean-anomaly-1953-2018_1.png
Indeed, looks like its all but confirmed we are on the next rung up on the global warming ladder now. 46 deg+ in Greece with mega wildfires there and in Canada. Likely we will see quite dramatic sea level rise over the next few decades which nobody is prepared for, add in more severe rain events and anywhere around rivers, especially coastal low lying, is not the place to be. But then steep sloped land will lead to slips, so maybe somewhere in between.
Again what people aren't understanding is that alone these things can be dealt with, the combination and frequence of climate change driven weather events along with resource scarcity will force managed retreat and reduce arable land. Its happening here already in Marlborough and possibly East Cape is next (though arguably the removal of the East Cape train line is the first sign anyway).
We reap what we sow and the squeaky climate change denier wheels have been so loud to cast doubt, they have held back real change.
Oh grow a spine Blobbles. I was in Sicily for the heat wave, life went on as normal. There were some scrub/grass fires near Palermo airport. The UK is having an unseasonably cool and wet summer, no headlines about that of course. While the NI of NZ has been pummelled with wind and rain, the East Coast of Australia has had amazing weather. Far more likely due to weahter patterns and blocking highs than "climate crisis". The vast majority of the planet is experiencing totally average conditions. Maybe NZ gets the weather it deserves?
"I was in Sicily for the heat wave, life went on as normal". Maybe this year, but if it gets worse every year?
Auckland had its driest year 2 years ago and will have its wettest this year. Is it just bad luck, or is it possible that scientists were right when they predicted more extreme weather events?
It won't be climate that get's us, it will be an asteroid or nukes or AI or a pandemic. I grew up in Auckland, it has always been a very wet region. I think my record was 8 consecutive school sports cancellations. I know a number of people in Sydney who left because of the weather.
Climate change may not take us out, but it probably will make our life worse. A few fairly simple changes now could make the future much better.
I think its a bit like budgeting, you could blow all your money now and have a great time followed by a terrible time, or you could cut back a bit now and have a better future. We seem to be picking the former, probably because its the next generations that have the terrible time.
he should try visiting underwater
Past weather events provide clues about what extreme temperatures could mean for the ocean. For instance, in December 2010, a wave of unusually warm water swept across the luxuriant and biodiverse seagrass meadows of Australia’s Shark Bay. In a matter of days, it destroyed a third of the habitat, unthreading the delicate seagrass quilt and, over the next three years, releasing between 2 and 9 billion tonnes of carbon into the atmosphere. “The losses there were phenomenal,” says Kathryn Smith, a researcher with the UK’s Marine Biological Association.
Nothing to see here, just 3 standard deviations from the mean Climate Reanalyzer. Likelihood that it is just random would be 0.3%
Here you go. Looks even worse the further back you go Climate Change: Global Temperature | NOAA Climate.gov
Sorry, all I get is try again later.
I'll help you here, from NASA: https://data.giss.nasa.gov/cgi-bin/gistemp/show_station.cgi?id=620040300000&dt=1&ds=1
It was much warmer in the 40's and remind me what was the CO2 level back then?
Whilst looking at Arctic temp graph, see if it looks anything like Atlantic Multidecadal Oscillation graph https://www.woodfortrees.org/plot/esrl-amo/mean:60/from:1897.5
Sorry for not picking a location and date range to suit your narrative. I'll stick with the NASA GISS data which you refer to above but will include all locations and go back to1880 Data.GISS: GISS Surface Temperature Analysis (v4): Analysis Graphs and Plots (nasa.gov). Even using your one eye, you should be able to see the trend.
Also:
Climate myths: The cooling after 1940 shows CO2 does not cause warming | New Scientist
Yes, undeniably, now that they "corrected" the data this is all you get and unadjusted data, like what I pointed to together with the resemblance to Atlantic Multidecadal Oscillation, which validates its accuracy, are hard to come by. They haven't managed to rewrite historical press articles yet, but I guess there is no need for that with the modern search engines in place.
From What Is the Sun's Role in Climate Change? – Climate Change: Vital Signs of the Planet (nasa.gov):
Since 1750, the warming driven by greenhouse gases coming from the human burning of fossil fuels is over 270 times greater than the slight extra warming coming from the Sun itself over that same time interval
Does not look underplayed. There is some effect from solar output but your argument falls apart towards the end of the graph with temperature spiking as irradiation falls.
FFS - Earth used to be a giant snowball - it also had millions of years of extreme volcanism - what is your point?
The greenhouse effect is an illusion? human activity is not contributing to it? humans is all goods.
Here's some doom pr0n for you
https://www.theguardian.com/environment/2023/jul/25/gulf-stream-could-c….
But we all read yesterday that falling loan demand means the markets are about to take off. And given what we all saw last time; slashed interest rates to stimulate borrowing that led to rampant asset price rises, that view is understandable. That's the vibe, everywhere - The Bottom is In!
We are at that stage where it is not as important that Central Banks 'get it right' but what happens if they get it wrong - again. It's easy to slash rates in half if they put Debt costs up, and that's wrong. But doubling them if they are wrong, having dropped them prematurely, and then have to raise them to chase price rises will be more than a disaster.
Hurry, eat all your food today. Tomorrow we won't need food. We won't be able to grow it with an unstable climate system anyway. How do stupid people get voted into positions crucial to a livable future? This guy should be playing with plastic toys in the sand pit.
Speaking of stupid people in a sandpit, the below is what happens when interest rates are lowered to ridiculous levels; misallocation of Debt at every level of society.
The Bank (of England) latest estimate of losses it will suffer over the next decade on government bonds amassed during the pandemic and financial crisis has ballooned... to £270bn in just three months...Predicted losses on so-called quantitative easing....Previous QE profits have also been spent...
https://www.telegraph.co.uk/business/2023/07/25/bill-for-bank-of-englan…
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