Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news oil futures prices rose almost 2% overnight.
West Texas Intermediate rose to almost US$100/bbl while Brent crude rose to US$112 a barrel. This followed Goldman Sach's forecasts of rising commodity prices and a lift in its Brent crude forecast to US$130/bbl within 12 months because of concerns about supplies, particularly out of Libya.
See more here at Bloomberg on higher oil forecasts from Goldman and Morgan Stanley.
Meanwhile, the New Zealand dollar briefly blipped over 80 USc overnight, partly on a rise in commodity prices, but also on signs inflation may not be as controlled as the Reserve Bank thinks.
A Reserve Bank survey of inflationary expectations showed the outlook for the next 2 years at the top of the Reserve Bank's 1-3% target band, forcing some to wonder whether the bank might be forced to hike the Official Cash Rate sooner than the early 2012 dates that many economists have been forecasting.
See Alex Tarrant's article here on inflationary expectations.
This potential for an earlier rise in the OCR makes the currency relatively more attractive. The New Zealand dollar rose to near 3 year highs on a Trade Weighted Index (TWI) basis, thanks in large part to a rise in the New Zealand dollar to 75.6 Australian cents. This is back to pre-quake levels.
The New Zealand dollar also rose against the pound to 49.3p after Moody's said it may downgrade 14 British banks (See more here at Bloomberg) and China's Dagong ratings agency cut Britain's sovereign credit rating to A+, forcing the pound lower against many currencies. See more at The Telegraph on the Dagong ratings cut.
Back on March 10 after the Reserve Bank's rate cut, the New Zealand dollar was sitting at 44p and 72 Aussie cents. See our interactive chart here and below.
No chart with that title exists.
24 Comments
Beware the Octopussy game...talk of rising prices with one arm while selling holdings with another...look to the 'sell in May and go away' being proved to be the key for the next 6 months or more as the piigs spread the debt effluent round the others and the pollies in Washington trigger the great default...and Beijing shoots a few hundred financiers for failing to hide the problems caused by Beijing. Oh and let's not forget the property collapse in aus and the usa...
But we're different...we have Chch and zillions of rotting homes and we have the Treasury!!!!
How about that so many too many talking it down maybe are right?
At some stage you are if you stay in the game going to get burned unless this is a genuine recovery. So the risk is in staying in the game and trying to get every last cent of profit that the ppl with the ultra fast computers at GS etc will bail long before you do....and do it so fast you are nowhere....this isnt a level playing field, so I think its foolish to play.
regards
Good interview of Fatih Birol this morning on Nine to Noon.
Didn't get to ERoEI, but did the export thing, sort of.
Now she's just got to join the dots.....
Interesting that he acknowledged they'd stuffed up - had just extrapolated past trends to project the future. Sounds like a few drongos around here......
Then - after the fact, they did a count (Birol claimed it was the first - bullshit) and found what we all knew. There are always limits.
At least in that, the IEA are ahead of our local drongos......
I think there has been comments that theIEA were afraid to look to hard at the supply side because the USA didnt want them to.....not sure why they finally did, about to lose credibility perhaps?
In any event I see no sign that govn's are now paying attention..in public anyway.....joining the dots behind closed doros maybe? Look for the actions that they have done so I guess.
regards
Fatih Birol, head of the International Energy Agency, admits on ABC Catalyst program that crude oil peaked in 2006:
http://www.youtube.com/watch?v=RaNz3qS5WAo
Remind me again what we are doing about this in NZ?
Birol absolutely bulshitted about one thing, but it's immaterial in the big scheme of things.
"We were the first to do a study".
Bollocks.
Laherre, Campbell, Deffeyes, Simmons, Hubbert, Erickson, Brown, Foucher, Catton, Meadows, and a host of us lesser beings who 'got' it.
At this kind of level:
http://www.theoildrum.com/node/5432
Contrast that to the 'Aunty Helen, Donny Boy" drivel posted here.......
Different world.
If you thought you have seen and heard it all, here is something most bizarre and most absurd, but received the Nobel Price for Economics in Sweden.
Mountebank wins Nobel for Infinite Planet Theory
http://steadystate.org/mountebank-nobel/
In his presentation of the award Mr.Norberg,chairman of the Sveriges Rijksbank, stated:
"Dr.Mountebank has demonstrated imagination and inventivness beyond what the rational mind can comprehend", and he continued, "All of our banks owe him a huge debt. We finance economic expansion. Our actions and decisions would be morally suspect if we lived on a finite planet."
From the blogger damnthematrix on the Chris Martenson website/daily digest today.
Gertraud T
loved this comment
For those who are familar with ‘the other Milton’s’ essay on “Methodology in Positive Economics, the affinity between Dr. Mountebank and the late Dr. Friedman will be understandable. Friedman’s essay is somewhat technical and might even be described as rough sledding for those lacking technical training in economics, but its point can easily be summarized. It is that starting with erroneous premises and building on them with flawed logic is an acceptable basis for economics, the reason being that this was what Friedman thought real scientists did. The enormous advantage of this approach, obviously, follows from the logical concept that any proposition can be proven from a contradiction, given enough time, blackboard space, and chalk. From any of the commonly accepted axioms of conventional economics, for example, it is relatively easy to demonstrate that black is white, freedom is slavery, or that if you follow your dreams, there are no limits to growth and human progress.
Thank you, Sveriges Riksbank! We are all Dr. Mountebank’s grandchildren now.
Crude oil and gold will lead a rally in raw materials, Ray Eyles, chief executive of JPMorgan’s Asia commodity business said in an interview last week.
Hmmm...where the speculation in precious metals goes to next is as much a matter of faith as fundamentals, or perhaps fundamentalist faith for the harder core gold bugs, but it has currency plays going for it as long as US economic policy remains an afterthought of a political standoff and Europe fails to face up to its sovereign debt inevitabilities.
i'm holding plenty of Oz gold stocks but will p/ly bale when it hits $1600 poz
re Dr Birol of the IEA .... He said very clearly on Nine to Noon that enhancing energy efficiency in the transport sector is vital.
But NZ Government’s “the market will solve everything” approach is the polar opposite of Birol’s warnings of the severity and urgency of oil scarcity and higher prices, and the IEA's prescription which is for massive and urgent government intervention.
Making out like a bunch of ostriches is incredibly stupid, negligent and dangerous and will leave us unprepared when the oil crisis really bites and our GDP falls as a result
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