Here's our summary of key events overnight that affect New Zealand, with news we can't escape the G20 meeting circus and the conflicting reports about the Xi-Trump negotiations.
But first up, it is the reverse story today. Bitcoin has dived from its giddy height, at one stage reaching US$13,879. Right now it is at US$10,752 and a dive of -US$3,127 or -23% - in just 24 hours. Easy-come, easy-go in the most speculative market going these days.
In the US, pending home sales bounced back somewhat in May, pretty much as expected, with a more than +1% rise since April, but they are still almost -1% lower than in May 2018. Things are even tighter in the West where sales are down more than -3% year-on-year.
We got another regional Fed factory survey overnight and that continued the trend of reporting a stall in growth. This condition is spreading widely now.
Not helping is that Boeing is being hamstrung by its giant 737 program, and that American car sales are weak.
And the final US March quarter GDP result was updated last night, only marginally lower than previously signaled at +3.1% growth which is strong. However, there is a little sting in these final numbers with the personal consumption component recording just +0.9% growth and far below the interim +1.3% that was estimated. This minor surprise is weighing on the US dollar today.
Also on the slide is European business sentiment.
Not helping will be that carmaker Ford has said it will cut about 12,000 jobs across its European operations by the end of 2020. They need to cut costs and restructure its European business, which is losing money.
German inflation is blipping up again. It was running at +2% in April but dropped to +1.4% in May. An overnight data release for June now pegs it at +1.6%.
All eyes are now on the G20 summit and the important Trump-Xi meeting. But the US president is now lashing out at everyone including allies, and that is having some interesting effects. One is that China and Japan are drawing closer. But keeping markets interested in the China-US relationship are reports that the US is pulling back on the threat of heavy new tariffs.
In China, industrial profits are still shrinking, continuing a trend that started in January.
Yesterday Asian markets ended with good gains. Shanghai was up +0.7%, Tokyo up +1.2% and Hong Kong was up a heady +1.4%. Europe didn't follow however, drifting lower everywhere except Frankfurt which posted a modest gain. On Wall Street so far, the S&P500 is following Shanghai, up +0.5% in late trade.
SWIFT has released data on the international acceptable of the Chinese yuan in international trade - and it is making vitually no progress. It is used in 1.2% of all trade transactions (if you count the eurozone as one block) and that is about the same level it was in 2016. This same data shows the euro making small gains, up to a 33% share, and surprisingly so is the greenback, now up to 46% share. It is those two, then also-rans. The NZ dollar is #13 at a 0.4% share.
The UST 10yr yield is slipping today and now at 2.01% and down by -4 bps. Their 2-10 curve is now at +27 bps and their negative 1-5 curve is at -18 bps. The Aussie Govt 10yr is at 1.34% and up +1 bp from yesterday. The China Govt 10yr is unchanged at 3.28%, while the NZ Govt 10 yr is up +6 bps to 1.63%.
Gold is lower today, down by -US$5 to US$1,406/oz.
US oil prices are marginally lower today. They are now just over US$59/bbl. The Brent benchmark is now at US$66.
The Kiwi dollar is still rising and across the board, and is now at 67 USc. On the cross rates we are firm at 95.7 AUc. Against the euro we are up at 58.9 euro cents. That pushes the TWI-5 up to 71.5 and a new three month high.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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25 Comments
Nope - I was technically in a tax loss position (all checked and confirmed by the top crypto accountant in NZ) - as the market only recovered on 2 april. So I had a nice cheque on its way to me. Quite happy to have some red for a while because the IRD will be slow and I'll be reinvesting to bitcoin thank you. Or maybe some alt coins hmmmm.
Lonewolfnz where are you?
Yesterday he/she posted that went to sleep Wednesday night and through Bitcoin earned $16k; in 2 days earned more than most people earn in a year.
I suggest that you woke up this morning a hell of a lot poorer.
Lonewolfnz you just shouldn’t have gone to bed last night.
Who was it smarting that they bought Bitcoin at $US 12,000 yesterday – ouch, down under $US11,000 today.
Lonewolf you rubbished my comment that all smart gamblers walk away when they are ahead at the roulette table. Yesterday, the smart ones did.
It depends what their forecast is for the shape of the price graph over the next month or so... It's fascinating to look in the graph at the last big rally and make some guesses as to what will come. This feels like a repeat but with an extra sniff of caution and the players in the game are banking the gains sooner than last time. So look out for a steady boost to around US$15k before the real turn kicks in. Followed by bull trap and then drop to averages again.
I'm right here of course. Still well in profit. Dollar cost averaging from 3.1k and quite happy. As for people saying I should pay my taxes of course I am. I filed my return for the year ended 31 March 2019 just yesterday. A very nice tax refund coming my way (recall that taxes only crystalize once you sell). Obviously a big tax liability for this year (so far) but that is a long time ago. I have seen 30-40 corrections like this, they are critical to vent steam and let us go higher. Bitcoin is up 250% this year - a correction like this (even if more is to come) is nothing. And my wealth is well into the seven figures, I sleep very easily thank you :)
Started in 2013, got burned but learned all my lessons. Stayed on the sidelines. Got back in 2017, got burned again (badly) but kept investing - heavily at the bottom at the way up. Spent my tax losses on more bitcoin. Started trading altcoins - had some amazing successes - like +700% returns. I was down 80% at one point believe it or not. Now heavily in the green. I think my portfolio is up x8 since December or so. Yesterday I think I made 16k, today I think I'm down 20k. But I just look at my portfolio chart and there is a little blip at the top which is today. As for altcoins i really don't know now - I'm just 90% btc, 10% ethereum.
Over the past month, $600 million worth of “tethers,” a cryptocurrency supposedly pegged to the dollar, have been minted into existence. Seemingly in tandem, Bitcoin’s price has climbed up from $8,500 to $11,000. Are the two events connected? When you see a large Tether “print,” said Harborne, it means a handful of wealthy clients have essentially preordered batches of tethers, days in advance, to then dump on the market - often before it’s begun to surge. Tethers are useful to these large holders, who can trade them—paired to Bitcoin, Ether, Litecoin and other coins—on high-liquidity exchanges that don’t accept fiat currencies.
This early communication between Tether and its investors, who must fork up a minimum of $100,000 to buy directly from the Tether website, is what generates the big round numbers seen in public prints—say, last week’s $100 million, said Harborne. To respond to the “rough, projected demand” conveyed by these investors, Tether must create a fresh batch of tethers, which requires key members sign off with their public keys; this takes time, and is the reason investors’ demands are aggregated into large batches
https://www.zerohedge.com/news/2019-06-27/has-tether-been-fueling-bitco…
"Almost $300,000,000 of BTC dumped in less than 5 bot infested minutes.
And nobody cares Tether almost hit 96 cents during those exact 5 minutes.
That’s sad."
The turnover of Auckland housing stock based on rolling 6 month sales of residential/lifestyle is near historical lows . At 3.5 , it would take about 28.5 years to clear all housing stock . For a market that has previously seen turnover/ housing stock reach 10 , the market has seized. So although mortgage rates are historically low, demand continues to slump. Yesterdays RBNZ data suggested that Auckland's winter will be cold.
For those worried about my safety - I am quite happy and relaxed. My only regret is not having cash on the sidelines to buy earlier this morning. I've been in this game since 2013 - these types of dips so worry me at all. -22% in a day is nothing, just helping us establish new high lows. One week ago we were below $10k, today we are still above $11k (just now) and everybody is saying the game is over. If we dip more that is fine too - I might actually have a chance to reach my target bitcoin holdings for the year.
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