American housing and factories stumble; Canadian jobs rise; China targets trade deal signing; EU gets its Brexit deal, now up to London signoff; UST 10yr yield at 1.74%; oil unchanged and gold up; NZ$1 = 63.5 USc; TWI-5 = 68.5

American housing and factories stumble; Canadian jobs rise; China targets trade deal signing; EU gets its Brexit deal, now up to London signoff; UST 10yr yield at 1.74%; oil unchanged and gold up; NZ$1 = 63.5 USc; TWI-5 = 68.5

Subscribe to our daily podcast here.

Here's our summary of key events overnight that affect New Zealand, with news of trade progress between the US and China, and on Brexit.

But first, American housing starts fell sharply in September from August and barely above the same month a year ago. Residential building permits fell too on the same basis, but they are still almost +8% higher than a year ago. Markets weren't expecting the sharp pullback from August however.

September American industrial production also fell, and this too was more severe than expected. The two largest retreats were in the oil patch, and for business equipment, both key leading indicators. Capacity utilisation is now at two year lows.

This same trend is reflected in the next regional Fed factory survey in the industrial Pennsylvania region. Current growth has almost stalled there.

Although it slipped back from a very strong August result, the Canadian ADP jobs report has delivered its third rise in a row, up +28,200 in September and more than making up for the decreases in May and June.

In the trade war negotiations, the Chinese now say they and the US are working on the text of a partial trade deal "and the goal is to end the trade war and cancel all additional tariffs". The goal is to wrap up this phase at the next APEC Summit in Chile next month.

In Hong Kong, in addition to banning umbrellas and masks, China has now banned to export of black clothing to Hong Kong. China is no place to be an All Blacks fan.

At the EU summit, the European Union and English negotiators overcame a major hurdle to Britain’s exit from the bloc, reaching agreement on the draft of a new Brexit deal that EU leaders approved. But that now faces a knife-edge vote in the London Parliament. Most analysts say it contains tougher conditions for the UK than the deal the previous English prime minister had negotiated. The bottom line on the Irish border issue is that customs border shifts to the coast and the Belfast province will in time be absorbed by the Irish Republic. Needless to say, this will be contentious in the London Parliament. If there is no Parliamentary approval, there will be an extension to the October 31 deadline.

Equity markets are quiet today, with only minor movements in all the major markets. Yesterday, the ASX200 closed down -0.8% which was one of the largest falls worldwide. The NZX50 was down -0.3%.

In Australia, their biggest bank is struggling with a "technology issue". More than eight million customers are affected be a system flaw that won't let customers or branches transfer money.

The UST 10yr yield is down -1 bp at 1.74%. Their 2-10 curve is positive at +15 bps. Their negative 1-5 curve is back down to just -2 bps. Their 3m-10yr curve has disappeared, now at +1 bps. The Aussie Govt 10yr is up +4 bps at 1.10%. The China Govt 10yr is unchanged at 3.19%. The NZ Govt 10 yr is now at 1.21%, up +2 bps since this time yesterday.

Gold is up again today, up +US$5 overnight to US$1,494/oz.

US oil prices are little-changed again today at just under US$53.50/bbl. The Brent benchmark is just on US$59.50.

The Kiwi dollar is stronger by a full +½c today, now at 63.5 USc. On the cross rates we are just under 93 AUc. Against the euro we are up at 57.1 euro cents. That puts the TWI-5 at just on 68.5.

Bitcoin is firmer at US$8,081 and up +1.4% overnight. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

Daily swap rates

Select chart tabs »

The '1 year %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '2 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '3 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '4 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '5 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '7 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '10 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

24 Comments

Comment Filter

Highlight new comments in the last hr(s).

I can't wait for the Dunedin Extinction Rebellion.

. . commuters on London trains showed overnight how to deal directly with these Extinction Rebellion buffoons ... apparently even public transport is on the agenda for this destroy democratism & capitalism movement ...

Yep, gotta admire those middle class soy warriors taking the fight to the poorest parts of London.
The change doesn't start with the individual, it starts with the poorest in society!

Part of our problem is that we tend to polarise debates. This means they are often about a very narrow perspective, or a single point while ignoring a much bigger picture. This is also demonstrated in the debate on another article on this site about fair pay here.

For your article PDK the Oil companies, and they are not alone by a huge margin, put shareholders and profits first, without any awareness that they operate in and around and are reliant on human society. They do not seem to understand that if their behaviour, actions, products are damaging to that society in anyway, then ultimately they are damaging to the company. Indeed the seem to perpetrate the attitude that somehow their wealth, power and influence somehow exempts them from the consequences of their actions either legally or naturally. Worse they do not seem to understand, or are wilfully and neglectfully ignoring, the outcomes that they are leaving for their children and grandchildren.

Awareness of this must change. The environmental, social and economic consequences of business activity must be made accountable to those decision makers. Currently laws seem to consider that when a company causes a problem then no one is accountable because a company is not a person. BUT a company is a human construct. Any thing that is done by a company is decided on by a person or people, and carried out by a person or people. Accountability MUST flow back to them!

Yep, just like H&S legislation making directors and senior managers accountable we need legislation making directors and senior managers, and their funding banks, accountable for the environmental destruction their products cause! Happy Fridays:)

Murray you do realise most oil production is state controlled so angst about "shareholders and profits first" are somewhat misplaced? Is the customer not accountable? No one is forcing you to use oil. Or do the benefits out weigh the "costs" for you?

It's an interesting question. By 'state controlled' do you mean they own the companies, and therefore profit from the oil production? There are several perspectives. Firstly, yes there is some things that i can do on the consumption end, but this is quite limited as our infrastructure, towns and cities are built in such a way that consumption of commodities such as oil are difficult to avoid, especially if you are not wealthy. Add to this the fact that culturally most societies are essentially ingrained to use oil , since around the beginning of the 20th century. Our economies are built around that consumption.

Secondly the owners and shareholders of these large companies, over the years have spent billions influencing Governments to favour their perspectives, and therefore their interests. So much so that today the move away from a fossil fuelled economy is both considerably expensive and difficult. The issues with the consumption of fossil fuels has been known for decades, but rather than using their profits to research and develop alternative power and energy sources, and thus ensure the survival of the company even if on a a different product. It is arguable even that if we had recognised the real issues, rather than being manipulated into being blind to them, that as the fossil fuel ran out or the climate issue started to ramp up (both of which ave already been and gone), the research testing and use of a viable and affordable alternative would already be completed and in place. This process takes decades for any product to mature because it needs research, testing, market trials, development, manufacturing maturity from established demand to achieve all this, none of which we have today on any alternative. We have potentially missed the boat!

It is not the ordinary man on the street who has done this, their choices and power is limited. it is Governments and the big corporations responsible.

Oh and take a look at the flak Greta is getting now. Those who dare to challenge the worlds leaders with an unfortunate truth are too often squashed by those leaders. We don't have a saying about 'shooting the messenger' for nothing!

Lobbying was around long before oil. I would love to see more money spent on R&D rather than government fuel consumption subsidies.

Nicely done profile - you have given us an example of the argument used in the article.

Until the known externalities are priced into fossil fuel usage they will continue to be cheap and widespread. The fossil fuel companies keep campaigning to prevent this. Once these costs are in place then a natural transition would occur using the free market you are so proud to push.

Yeah how do you calculate the benefits of the last thirty years of global greening? "The fossil fuel companies" are mostly state owned - states are lobbying themselves?

Another point Profile - if it were as simple as ordinary people simply choosing not to use fossil fuels, plastics etc, why then have we not been too keen to vote in Green Parties into Government? This again is because the rhetoric, the information fed out to the general public is skewed. Green Parties have become more popular as the internet as improved information sharing, but it takes time. The only trouble is - it is time we are running out of as well!

That is a very good piece. I like the bit about the players thinking they are clever, when they are just being played as much as the next guy. Sort of sums up the guys crowing about their property investments. It relies on them not having cognisance, and they don't.

I first noticed that approach in the Shipley era - blame the 'other' for what you're guilty of.

In this case, the religion and the belief - the false belief - was that economic growth could go forever and ever, amen.

Actually, we are a habitat-requiring ecologically-conforming life form. And life forms are energy systems where enough energy is taken in, to keep entropy at bay. Individually it's temporary - all lifeforms die. Collectively, it needs a positive energy input - and growth requires ever-more energy input. So we have done that, drawing down a one-off source, at such a rate that the exhaust gases of the burning, are altering our habitat.

If you need to believe that's not happening, there is a broad (although somewhat shaky-looking, currently) church full of economic priests, chanting 'growth, growth, growth'... If you want to follow a splinter group, there is always the Church of Agricology - performing the miracle of the loathes and the fissures at a nitrogen-oozing paddock near you. Ask not for whom the bells toll...

As for Greta - I find it interesting. All she is doing is holding up a mirror. Funny to note the people who don't like what they see. Another sailor who 'gets it' (as a sailor myself, I have long thought that being self-reliant in a small world makes you grasp the Spaceship Earth problem) is Ellen MacArthur: https://www.youtube.com/watch?v=QuoXw8A3ooc

G 7 news.

The USA are taking the Trump domestic band on the road.

https://youtu.be/2WyA5Dd692k

Global growth
Rolling back prosperity killing regulation.
Open energy markets

Encourage the rest of the world to get on board.

You can remove all red tape. All restrictions (EPA in the US or the RMA here). And you still won't solve the energy/resources/pollution/limits to growth problem at this point.

There is an argument for hastening the collapse - there will be more left to build the replacement with.

How far into current government policy and thinking would you say the ... hastening the collapse argument .... is.

Have you got any more background to this. Are there are papers, research or economic papers?

I doubt they dare go there, and I'd suspect a minority of them get it - and even less would admit!

Yes, yes, yes, yes. Here's a reading-list:

Thinking in Systems: A Primer - Meadows
Limits to Growth (and updates) – Meadows et al
LTG reviewed – Turner
LTG reviewed – Jackson/Webster
The End of Growth - Heinberg
Short History of Progress – Wright
Guns, Germs and Steel – Diamond
Overshoot – Catton
10 Billion – Emmott
Collision Course - Higgs
Endgame – Jensen
The Long Emergency - Kunstler
The Last Oil Shock – Strahan
Societies Beyond Oil – Urry
Powerdown – Heinberg
Afterburn: Society Beyond Fossil Fuels – Heinberg
Without Hot Air - MacKay
Pollution: the World Crisis - Hamblin
Collapse - Diamond
Collapse of Complex Societies – Tainter
Failing States, Collapsing Systems - Ahmed
The Collapse of Globalism – Saul
Five Stages of Collapse – Orlov
Moron’s guide to Global Collapse - Orkin
Collapse now and avoid the rush - Greer
This Civilisation is Finished – Alexander/Read
Brief History of the Future – Attali
Doughnut Economics – Raworth
The Economy of Nature - Ashworth
Carbon Neutral by 2020 – Harre &
Children, Citizenship and Environment – Hayward
‘The Big Questions; What is New Zealand’s Future?’ – various
Unquiet Time: Aotearoa/New Zealand in a Fast Changing World - James
Safeguarding the Future: Governance in an uncertain world – Boston
Future Shock - Toffler
A Question of Balance – Mercer
Approaching the Benign Environment – Fuller et al
Bottleneck – Catton
The Confidence Trap - Runciman
How Democracy Ends – Runciman
Out of the Wreckage – Monbiot
To Live on Earth – Brubaker
The Divide – Hickel
The Spirit Level – Wilkinson/Pickett
Prosperity without Growth – Jackson
Prosperity without pollution – Hirchhorn/Oldenberg
Fostering Sustainable Behavior – McKenzie-Mhor/Smith
the new zealand project - Harris
Principles of home - McCleod
Creating Regenerative Cities – Girardet
For the Common Good – Daly/Cobb
https://ftalphaville-cdn.ft.com/wp-content/uploads/2013/01/Perfect-Storm...
https://www.interest.co.nz/opinion/99764/labour-without-energy-corpse-ca...
https://steadystate.org/category/herman-daly/
https://www.albartlett.org/presentations/arithmetic_population_energy.html
https://dothemath.ucsd.edu/
https://ourfiniteworld.com/
https://questioneverything.typepad.com/
https://www.researchgate.net/publication/267751719_Is_Global_Collapse_Im...
https://en.wikipedia.org/wiki/World3
https://www.zerohedge.com/news/chris-martenson-trouble-money
https://questioneverything.typepad.com/
http://www.dieoff.com/
https://www.parliament.nz/en/pb/research-papers/document/00PLEco10041/th...
https://www.victoria.ac.nz/__data/assets/pdf_file/0011/1753571/Foresight...
https://rintintin.colorado.edu/~vancecd/phil1100/Hardin.pdf

You might find this interesting reading when you talk about open markets.

Georgist economics

Main article: Georgism
For classical economists such as Adam Smith, the term free market does not necessarily refer to a market free from government interference, but rather free from all forms of economic privilege, monopolies and artificial scarcities.[1] This implies that economic rents, i.e. profits generated from a lack of perfect competition, must be reduced or eliminated as much as possible through free competition.

Economic theory suggests the returns to land and other natural resources are economic rents that cannot be reduced in such a way because of their perfect inelastic supply.[12] Some economic thinkers emphasize the need to share those rents as an essential requirement for a well functioning market. It is suggested this would both eliminate the need for regular taxes that have a negative effect on trade (see deadweight loss) as well as release land and resources that are speculated upon or monopolised. Two features that improve the competition and free market mechanisms. Winston Churchill supported this view by the following statement: "Land is the mother of all monopoly".[13] The American economist and social philosopher Henry George, the most famous proponent of this thesis, wanted to accomplish this through a high land value tax that replaces all other taxes.[14] Followers of his ideas are often called Georgists or geoists and geolibertarians.

Léon Walras, one of the founders of the neoclassical economics who helped formulate the general equilibrium theory, had a very similar view. He argued that free competition could only be realized under conditions of state ownership of natural resources and land. Additionally, income taxes could be eliminated because the state would receive income to finance public services through owning such resources and enterprises.

What about poor TV3?

It now becomes apparent why the New Shub reporters have been getting a bit tougher on the government.

New Shrub reporters may have been getting tougher on the government because Taxcindas coalition are unravelling... awash with missed targets .. . scandals... outright failures and broken promises ...

... New Stalk journos ( Barry Soppy ) have been equally tough ... this government is a shambles ...

The only thing that may save them at the 2020 election is if Taxcinda marries Clarke Gayford in a glam fest wedding with celebs , just a month or 2 before the voting .. ... smiles and hugs .... ooooooh ... ain't she luvverly ... so pretty in white .... aaaaah ....

If you don't change the way "money" is created and distributed, you change nothing.

https://www.oftwominds.com/blogoct19/decay10-19.html