Here's our summary of key economic events overnight that affect New Zealand, with news Australia thinks its financial system is fit for purpose facing international risks.
But first, incoming China foreign direct investment fell more than -19% in February from a year ago, the largest fall since the GFC and far more than in the early stages of the pandemic. Recent 'legal' changes and the rise of the MSS in the Middle Kingdom is making it too tough to operate there. The trade disengagement underway isn't ending. Only US$14.3 bln arrived as investment in February about half the stunted levels on one and two years ago.
Meanwhile, China is making a concerted effort to qualify for the CPTPP trade group with new 'negative list for cross-border trade in services' management. "We have proactively aligned our policies and legislation with the CPTPP rules in relevant areas and are well-prepared for market access offers in goods trade, trade in services and investment," a spokesperson said overnight.
The recent visits by Chinese foreign minister Wang Yi to both New Zealand and Australia in an unusual 'charm offensive' by the usually prickly Wolf Warrior needs to be seen in the light of this CPTPP push.
In Japan, inflation is finally embedding there. It's been a long slog to get out of delation. Their inflation rate climbed to 2.8% in February from 2.2% in the prior month, the highest figure since last November. It has been over 2% since March 2022.
Across the Pacific, although they eased in January Canadian retail sales rose in February according to an early estimate. But both shifts are minor. Hesitating car sales are behind the lackluster results.
Across the Atlantic, Germany companies are gaining confidence, and rather quicker now. Sentiment for Europe's largest economy reached its highest point since June 2023, fueled by anticipations of potential interest rate cuts by the European Central Bank and a gradual easing of inflationary pressures. But German consumer sentiment remains stick at low levels, generally unchanged since May 2022.
Closer to home, the Australian central bank released its half-yearly Financial Stability Report yesterday (Friday) and it concluded that while conditions will remain challenging for many households and businesses there this year, "strong conditions in the labour market, the large savings buffers accumulated by many borrowers during the pandemic and rising housing prices are helping households to adapt." The Australian financial system has a high level of resilience and is well positioned to continue to support the economy, they say.
The UST 10yr yield started today at 4.22% and down -6 bps from this time yesterday, and -9 bps from a week ago. The key 2-10 yield curve inversion is slightly more at -38 bps. And their 1-5 curve inversion is less at -78 bps. And their 3 mth-10yr curve inversion is more at -117 bps. The Australian 10 year bond yield is now at 4.03% and down -9 bps. The China 10 year bond rate is holding at 2.31%. The NZ Government 10 year bond rate is now at 4.62% and down -4 bps from yesterday and down -13 bps in a week.
Wall Street opened its Friday session essentially unchanged but is heading for a weekly gain of +1.6%. Frankfurt ended its week with a +1.5% weekly rise. Paris was down -0.3% for the week. London was up +2.6% for the week. Tokyo ended its Friday session up +0.2% for a stellar +6.1% weekly rise and just off an all-time high. Hong Kong ended down a sharpish -2.2% on Friday to end their week sown -1.1%. Shanghai ended its Friday down almost -1.0% for a -0.3% weekly dip. Singapore was unchanged yesterday. The ASX200 closed out its final day of the week down -0.2, but up +1.3% for the week. The NZX50 ended yesterday up +0.5% for a weekly rise of +1.7%.
The Fear & Greed index has changed little in a week and is still in the "greed" level, similar ro a week ago and a month ago.
The price of gold will start today firmish by +US$2 from yesterday at US$2159/oz. And that is very little different to week-ago levels.
Oil prices stayed down at just on US$80.50/bbl in the US while the international Brent price is still at US$85/bbl. These levels are also unchanged in a week.
The Kiwi dollar starts today at just under 60 USc and down -½c from yesterday at this time. A week ago it was at 60.9 USc so almost a -1c fall since then. And it is the first time in four months since we have been below 60 USc. Against the Aussie we are little-changed at just under at 92 AUc. Against the euro we are still just on 55.5 euro cents and also little-changed. That all means our TWI-5 starts today at 69.3 and down -30 bps from yesterday and down -60 bps for the week.
The bitcoin price starts today at US$63,588 and down -4.6% from this time yesterday. A week ago this price was US$68,378 so a -7.0% fall since then, Volatility over the past 24 hours has been high at just on +/- 3.2%.
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65 Comments
Do we not trade oil in USD?
NZD falling against USD falling against Oil.
Meanwhile the aggregate bank balance sheet is on life support, needing ~$4b in new monthly loans just to break even. Even a small inflation spike at this point would throw a dog amongst the cats amongst the pigeons.
Edit: aggregate bank balance sheet doesn't seem to have grown at all in about 18 months. Uh oh...
I see that MAGA nut job, Taylor Green, has submited a motion to dismiss the speaker of the house Johnson. Johnson has been the single handed roadblock to Ukraine aid. Obviously she doen't get Trumps tweet memos. Perhaps she will withdraw the motion, but if not, it may provide an opening for aid approval in the next few months?
Let's not forget the entire interest rate narrative is PR to detract from the true monetary policy, which is defined by the Quantity and allocation of credit creation. Prices & rates only matter in theory, in equilibrium - a fiction https://sciencedirect.com/science/article/pii/S0921800916307510 https://onlinelibrary.wiley.com/doi/full/10.10
Big pharma needed to get of of Ivermectin — which has been approved for human use by the agency since 1987 — as a treatment for covid19 so it could railroad in high profit experimental therapies under "emergency use" without standard trials. Lucky they had some mates in big government and the MSM wrapped around their finger to help out.
"The U.S. Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) have agreed to remove social media posts and an online article that warned against off-label use of ivermectin to treat COVID-19, according to an agreement entered in a federal court Thursday.
“The damage the FDA inflicted will linger, but future patients are now protected from one meaningful government intrusion into their medical care,” said Bowden.
https://www.nature.com/articles/ja201711
https://www.sciencedirect.com/science/article/pii/S0166354220302011?via…
https://thetexan.news/issues/healthcare/houston-doctors-lawsuit-forces-…
Ok, I’ll bite.
There is too much money (and reputations) at stake for a cheap medication with a long term safety history to be proven effective against C-19.
For those interested the following link is a detailed article which illustrates the trouble that Big Pharma will go to (note 7 different trials) to provide poor test results on Ivermectin effectiveness.
And yes if you put Pierre Kory into google - the first search finding (to Wikipedia) indicates he is ‘Known for: COVID-19 Misinformation’ – the censorship industry is at work.
Would have been a great treatment for your "antivax" mates. Perhaps they were just more well read about Peru than your good self?
"...In ten states of Peru, mass IVM treatments of COVID-19 were conducted through a broadside, army-led effort, Mega-Operación Tayta (MOT), that began on different dates in each state. In these MOT states, excess deaths dropped sharply over 30 days from peak deaths by a mean of 74%, in close time conjunction with MOT start date (Fig. 1B). In 14 states of Peru having locally administered IVM distributions, the mean reduction in excess deaths over 30 days from peak deaths was 53%, while in Lima, which had minimal IVM distributions during the first wave of the pandemic due to restrictive government policies there, the corresponding 30-day decrease in excess deaths was 25%.
...We believe that the evidence to date supports the worldwide extension of IVM treatments for COVID-19, complementary to immunizations. The indicated biological mechanism of IVM, competitive binding with SARS-CoV-2 spike protein, is likely non-epitope specific, as reviewed [8], possibly yielding full efficacy against emerging viral mutant strains. IVM has been safely used in 3.7 billion doses since 1987, well tolerated even at much greater than standard doses [34,35] and used without serious AEs in the three high-dose COVID-19 treatment studies noted above [34,36,37]. In the current international emergency of COVID-19, with mutant viral strains, vaccination refusals and potentially waning immunities over months presenting new challenges, IVM can be an effective component of the mix of therapeutics deployed against this pandemic."
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8383101/
...
Are you commenting on this research or did you fall for the anti-Trump MSM pile on slur? Another good example of the MSM doing big pharmas dirty work to protect their advertising stream, and pharma emergency use windfall profits.
In this first-in-human study, endotracheal narrow-band UVA therapy, under specific and monitored settings, appears to be safe and associated with a reduction in respiratory SARS-CoV-2 viral burden over the treatment period. UVA therapy may provide a novel approach in the fight against COVID-19.
China has a clear choice. Continue down the path of the past few years of increasing inward authoritarianism and illiberalism, and backing the likes of Russia, or turning back, at least part way, to where it was ever so slightly heading 10 years ago.
I know which option is better for China, and the world
The adjective “inscrutable” has described China with good reason for as long as recorded time. What China has achieved. let’s say since covid, is an undeniable ascendancy over its not always been a friend Russia. Recent developments with India strengthening its border defences have more than irritated the CCP and it would seem fairly clear China has ambition with regard to territory both north and west. Hardly unique in history to start an international adventure when the homeland is troubled. China’s massive military is predominantly geared to widespread land manoeuvring which is understandable given largely their own terrain. Of course that same terrain neighbours China abundanty.
There are times when one wonders whether Prime Minister Narendra Modi has been a below-the-radar ‘Russianist’ or an unabashed Russophile. Of course, it is possible to be both. Modi’s congratulatory message on Monday to Russian President Vladimir Putin on his magnificent election victory made headlines against the backdrop of the nasty characterisation of the poll as a sham and a fraud by the Western and Indian press. Link
Swiss Central Bank Just Sent a Warning to the World
Few were expecting anything more than a few franc sales from the Swiss National Bank today. Instead, the SNB boldly cut its ST rate specifically because it knows what's coming from around the rest of the world. And that doesn't mean inflation in Switzerland or anywhere else.
Every company I know is consulting on restructures, it seems about 5-9% across the line, they are taking the Government lead and reconsidering who they need in a slower environment. It's a very tough job market out there at the moment.
The is normal recession stuff, gets ugly if there is a second round....
Harry and Meghan wish Kate 'health and healing' amid cancer fight
https://www.nzherald.co.nz/lifestyle/catherine-princess-of-wales-i-am-h…
Appreciate rec’d previous advice on here but in simple terms still see it that NZ sells electric power at a cheap rate to process raw material shipped in from another country and apart from the employment and associated activities for the manufacturing there’s not anything else in it for us? Surely redirection of that very large power source into the national grid would benefit all NZrs and upgrading the transmission a cheaper option than the now scrapped Lake Onslow concept.
NZ Building Code - Smoke Alarm Requirements.
From November 2023 the Building Code Acceptable Solutions for Protection from Fire (C/AS1 and C/AS2) will be amended to make interconnected smoke alarms the minimum fire safety system for new built homes and substantial renovations, citing NZS 4514:2021 – Interconnected smoke alarms for Houses. The standard allows for wirelessly or hard-wired interconnection, using either 10 year long-life battery-powered or 240v mains powered alarms. The changes will have a 12-month transition period ending in November 2024
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