US industrial data weakens; China industrial data firms; Japan raises GST, EU jobless rate lower; Aussies more dependent on China; UST 10yr yield at 1.68%; oil and gold down; NZ$1 = 62.6 USc; TWI-5 = 68.3

US industrial data weakens; China industrial data firms; Japan raises GST, EU jobless rate lower; Aussies more dependent on China; UST 10yr yield at 1.68%; oil and gold down; NZ$1 = 62.6 USc; TWI-5 = 68.3

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Here's our summary of key events overnight that affect New Zealand, with news American industrial activity is waning from a good level, and China's is rising from a weak level.

Analysts are bracing for very negative American car sales reports for September with some seeing a decline of more than -10% year-on-year.

That is showing up in factory activity data. The influential Chicago regional purchasing managers index has drifted back into contraction.

The September update of the Dallas Fed regional survey, which has been the most optimistic of this series, is still generally positive but many indicators including the current General Business Outlook one, are sliding.

China has reported its official factory PMI for September and although it is still contracting, the degrade is now quite minor. They will take that as a 'win' in the current climate. Better for them, their services PMI is stable at a healthy expansion. These official survey actually have credibility because the independent private sector sets all show a better situation. In fact, the Caixin PMI rose in September to its highest level in 20 months, showing a solid expansion among its surveyed firms.

In Japan, they have just increased their GST to 10% and this encouraged a rush to buy big-ticket consumer items in the past few weeks. But, industrial output data isn't flash according to their official statistics, down -4.7% year-on-year in August.

In Hong Kong, not only do they have trouble on the streets and tensions ahead of China's big celebrations, their air quality is terrible with heavy smog wafting over from China causing dangerous conditions. But there is more than just smog coming in from China; the PLA have reinforced their Hong Kong garrison to 12,000 troops, a doubling in recent days.

In the EU, their jobless rate ticked lower in August, now down to 7.4% with a range of 17% in Greece to 2% in the Czech Republic.

New research in Australia shows that 38% of their exports are sold to China. The political tensions between the two countries don't seem to be inhibiting trade. For perspective, the same relationship has New Zealand far less dependent, selling 26% of our exports to China in the year to August.

The UST 10yr yield is little-changed at 1.68%. Their 2-10 curve positive at +6 bps. Their negative 1-5 curve is unchanged -21 bps. Their 3m-10yr curve is also unchanged at -26 bps. The Aussie Govt 10yr is now at 1.02%, an overnight rise of +7 bps. The China Govt 10yr is unchanged at 3.16%. The NZ Govt 10 yr is at 1.12%, a -1 bp dip from yesterday.

Gold is down sharply, down -US$27 to US$1469/oz.

US oil prices are also lower today, down more than -US$1 and now just under US$55/bbl. The Brent benchmark is just under US$61.

The Kiwi dollar is weaker today, now at 62.6 USc. On the cross rates we are down to 92.8 AUc. Against the euro we are at 57.4 euro cents. That puts the TWI-5 back down to just on 68.3.

Bitcoin is now at US$8,263 and +3% higher than this time yesterday. The bitcoin rate is charted in the exchange rate set below.

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23 Comments

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A survey out of Australia reveals sales assistants and cleaners/laundry workers to be the 2 put of 3 most common occupations for those on post-study work (485) visas.
A similar study on this side of the Tasman might reveal similar trends.

Those lazy Aussies are just not interested in doing menial jobs ( same as us), so it makes sense they have to import people to do them. Besides, it gives Aussie doctors a better level of conversation to engage in when they bump into a cleaner in the corridor.

Right. The OECD found our workforce in NZ to be overqualified, unproductive and bad at math.
You never know when a criminal psych major at the grocery checkout could solve your shoplifting problem and an engineer from the subcontinent driving your taxi could fix a vehicle breakdown besides making more interesting conversations.

dont forget the overqualified bit is all just part of the Debt ponzi
it serves many purposes
- keeps thousands busy and off the unemployed numbers instead of looking for non existent jobs
- it follows that rhetoric that the debt clocked up is a great investment for the brighter future (its coming ... it really is.... actually even Sir Chon seems to have gone quiet on this one) ... while the boomers cash in on rental returns
- it reinforces the old chesnut that we just need more education to solve the worlds ills .... its all in our head ... man can overcome resource limits through sheer will power
https://www.telegraph.co.uk/royal-family/2019/09/29/duchess-sussex-reuni...
the irony being the british empire went to africa for resources ...

This seems relevant too:
Expanding the higher education sector was never about boosting social mobility. It was about churning out Labour voters – and in that respect Blair’s policy has succeeded like gangbusters. In the 2017 General Election, Labour had a 15 per cent lead among university graduates — and among 18-24 year-olds the gap was a whopping 35 per cent.

The reason for this isn’t simply because young people always skew left of centre – after all, in 1987 Labour’s lead over the Conservatives among 18-24 year-olds was only two per cent. It’s also because in the past 40 years university lecturers have become much more left-wing.
https://www.telegraph.co.uk/politics/2019/09/27/tony-blairs-diabolical-p...

How to get net zero by 2050 in two easy steps: "...to achieve net-zero carbon dioxide emissions by 2050, the world would need to deploy 1.6 mtoe nuclear plants worth of carbon-free energy every two days, starting tomorrow and continuing to 2050. At the same time, a 1.6 mtoe worth of fossil fuels would need to be decommissioned every day, starting tomorrow and continuing to 2050.
Or if you don't like nuclear and don't mind intermittent energy supply "...~1500 wind turbines (2.5 MW) over ~300 square miles, every day starting tomorrow and continuing to 2050."
https://www.forbes.com/sites/rogerpielke/2019/09/30/net-zero-carbon-diox...

And at the end of it all it is unlikely to make any noticeable change to our climate.

However with the fossil fuel era coming to an end a replacements needs to be found and at this point nuclear is the only real option.

Yes net zero sounds good but leaves us with 200 years of industrial CO2 in our atmosphere. We will need net minus something to actually stop continuing climate change.

I suspect you will find that the two you are replying to don't actually think that the CO2 we've been pumping into the atmosphere for a century affects climate.

Of course it has an effect, nobody can deny that CO2 is a greenhouse gas! The real unanswered question is how much of an effect and history tells us that at levels of around 450ppm it is Bugger all.

long time view, CO2 has been at 7000ppm

https://i.warosu.org/data/sci/img/0084/24/1476944857462.png

http://www.biocab.org/Geological_Timescale.jpg

Last 5000 yrs

https://www.iceagenow.info/wp-content/uploads/2018/03/Last-4-warm-period...

Current warming is not out of line with last 3 warming periods on a earth that is on a cooling trend.

Is anything conclusive? No! but worth looking at both sides of the debate and make up your ow mind instead of just taking the propaganda that is peddled out of IPCC and other governmental bodies.

Ha, this "argument" cracks me up. It's been 7000ppm before so we don't have a problem. Maybe investigate whether that level is conducive to human life. Research mass extinction events and understand the link between ocean warming and absorbing excess CO2.

Something humans don't seem to understand is balance. Earth's natural systems ultimately operate in balance and CO2 sequestration is part of this. Relatively equal parts stored by design in the soil, plants and forests, and the atmosphere. The ocean has it's own role to play but is still connected to all other parts.

Have we ever considered that all that fossil fuel carbon was stored for a reason, and it wasn't for baubles and trinkets?

Thank you for these links.

Yes net zero sounds good but leaves us with 200 years of industrial CO2 in our atmosphere. We will need net minus something to actually stop continuing climate change.

Helen was ahead of her time. The Democratization of Airpower - "The big question that is finally going to be asked, in countries rich and poor, is why the air forces insist on buying ultra-expensive manned aircraft instead of flocks, swarms and fleets of small, cheap, disposable unmanned vehicles. The truth is that air forces are run by pilots, and they like to fly planes, but what happened in Saudi Arabia last week will finally give the civilian authorities arguments that the aviators cannot resist or ignore.
So, the shift to primary reliance on unmanned aerial vehicles (UAVs) for offensive action will get underway at last, and the result will be the democratisation of air power. Only rich countries with a mastery of high technology can own F-35s. Even the smallest, poorest country (and some non-state actors too) can afford to build or buy a few thousand drones and a couple of hundred basic cruise missiles."
https://www.thetelegram.com/opinion/national-perspectives/gwynne-dyer-th...

But but what about the Iceman and Maverick !!!

As per OECD's data, our productivity was higher in 2011 than in 2018.
Australia's has been stagnant at 2015 levels - right about the time when the country's mining investment boom came off the burner.

The gap between labour productivity levels here and in Australia was largely caused by lower levels in the construction and financial services as per Economic Survey of New Zealand 2017.

Crisis what crisis

Have vested interests truly SuperTramped this low cost housing solution.

https://i.stuff.co.nz/dominion-post/news/wellington/115369645/wellington...

What really happened in the Windie City?

That's an interesting story. So cheaper homes appear to be possible, but the Council and other developers basically blocked it. Not much hope that central govt would be interesting in helping, they're on the same team of keeping the poor poor, and dependent. Or just want to keep themselves rich, and expensive homes is just a side effect.

Why on earth would politicians and bureaucrats choose less power over us vulgar commoners?

You cannot believe ANYTHING coming out of China .