90 seconds at 9 am: China, Euro-zone and Britain ease monetary policy within 45 minute window; All eyes on US jobs data for QE III green light; NZ$ hits record high 65 euro cents

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of concerted central bank action overnight to ease monetary policy to try to turn around a slumping global economy.

The People's Bank of China delivered the main surprise, cutting its main deposit and lending rates by 31 basis points.

This second easing of Chinese interest rates within a month came moments after the Bank of England announced an increase in its money printing programme to buy long term government bonds known as quantitative easing. Less than 45 minutes later, the European Central Bank cut its main interest rate by 25 basis points to 0.75% and reduced its overnight deposit rate for banks to 0%. See more here at Bloomberg.

The Chinese move surprised many, coming so soon after a previous easing and suggesting figures due on the weekend on Chinese economic growth could be weaker than expected.  See more here at Bloomberg.

However, some had hoped the European Central Bank would do more to boost the Euro-zone economy, which is slumping back into recession in the wake of the latest debt crisis turmoil. European stocks fell 1.2% and US stocks fell 0.4%. Spanish and Italian bond yields spiked. See more here at Bloomberg.

The trouble is central banks are nearing the edge of their ability to influence economies as interest rates get ever closer to zero. They are essentially now pushing on a string. Borrowers are ignoring record low interest rates because either lack the confidence to invest or already have too much debt. Many European and US bankers are also reluctant to lend their money out, given borrowers either don't have good enough credit ratings or the banks themselves are hoarding cash to bolster their profits and repair shredded balance sheets.

Meanwhile, Investors will watch US non-farm payrolls figures closely tonight. Economists are expecting US jobs to grow around 95,000 in June, up from the much-weaker-than-expected 69,000 growth in May. Another weak number is widely expected to give the US Federal Reserve the green light for a third round of Quantitative Easing (QE III) when it next decides on monetary policy on August 1.

There was a glimmer of hope for the jobs figures after US jobless claims last week were better than expected. See more here at Bloomberg.

All this monetary policy easing, money printing and rate cutting overnight in the Northern Hemispher made the New Zealand dollar look relatively attractive. It was solid around two month highs of 80.4 USc this morning and hit a fresh record high of 65 euro cents overnight. It is also up at a two month high against the British pound of around 51.8 p.


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After the "one week wonder" and "one day wonder" we now have the "45 minutes wonder".
How Wonderful !!!
Spain's and Italy's Bonds yields went up instead of down !!!
China's leaders panicked and cut rates even before the latest statistics is released...
Like Mish sums up the rational of the Central Bankers of EU, UK and China :
"The economy has been flushed down the tiolet and we don't know how to get it back !!!"
Lets see what the Feds will do next ......the usual....."print baby print"  


Central Banks Helpless As Denmark Goes NIRP, Cuts Deposit Rate To NEGATIVE 0.2%

Bernanke – My Goal is to Wreck Social Security

Bernanke – My Goal is to Wreck Social Security
Interesting but frightening article - saving the banks while winding down the shadow banking industry is an expensive and probable disastrous exercise for most.
If this is what constitutes orderly management we need to push politicians to review the process of debt liquidation.
The Japanese will also be lamenting the expiry of the 15% 30 year coupon Tbonds issued back in 1982.

Out food shopping.... butter down to $2.99 per 500g, and milk $3.10 per 2 litres, Cheeses back to $8.00 for a kilo, or less, depending on size of purchase. As a family we are pretty dependent on the dairy industry, through our roles in various service industries. We are shutting up shop on spending. The ominous signs are there. El Nino on the cards also.... great....not. Buckle up Bill and John, its gona get ruff,

Fonterra cheese in the ogranic shop here is $2.70 for 1/2 a kg  thats US$, cheapest cheese by a wide margin.

Who is gouging NZ citizens on their home turf. We are suckers. Home advantage is only for rugby players?

Is it edible though, lets face it the US has not had a great write up on making good cheese? And how much caesium 134 and 137 is in it?

Enough to keep your teeth clean.

Enough to keep your teeth clean.
 And no added preservatives...

I do hope you are dodging west coast tucker over there.... it really doesnt look good with the fallout.

Haven't felt anything yet and know one up here even talks about it, its not in the papers or on Telly, must be a conspiracy by those wooly gits. If you cannot see, cannot touch it or smell it it cannot be bad for you.

Yanks built it. And built it badly. Yanks have dirty bombed themselves. 

Oops, speed reading.....missed the bit that said Fonterra cheese, sorry Andrew. But just because it has their brand does not mean it was NZ milk, thats the risky bit. Fonterra using overseas milk products and putting our name on it....yes, I dont own shares, but I create a good few thousand heifers each year with my AB....so its my industry too.

The BoE has little choice but to print when the public private partnership programme known as PFI in the UK is sucking billions of unpayable taxpayer pounds from Treasury's coffers. 
These schemes are locked into handsome interest rate plus cost deals benefiting the lenders when the government could have extracted a much less costly borrowing rate  through Gilt issuance.
I am sure Bill English will blunder ahead on our behalf and consummate the most expensive PPP deals known to mankind while government real borrowing costs sail below zero. Not to worry those owed a living will toast the citizens from a warm island somewhere else.

Someone PMed a link to this private healthcare outfit - Kensington Hospital - in Norhland - I guess they are a PPP or are they designated as something else? Certainly associated with Manaia Primary Health Organisation (MPHO).

A bungled NZ PPP scheme expected to cost the taxpayer $millions beyond the egregious initial estimates.  The self-serving fools promoting these schemes, probably in receipt of prior knowledge they will fail one way or another, should be treated as the rackateers they probably are.

"The London Interbank Offered Rate scandal will erupt into an uncontrollable firestorm, hitting one chamber and then the next, with rapid contagion"
Why no comment in the poodle media.....this LIBOR exposure is like seeing for the first time what really happens inside the parasitic banking community of criminals and pollies and regulators.
Barclays is just the opening gambit....brown smelly stuff will splatter over them all before the Queen topples.
"Anyone who believes the TNX fell from 3.6% in 2011 to under 1.8% was from a flight to quality is either drinking Wall Street kool-aid or duped by their marketing flyers or captivated by media propaganda or just plain stupid. The vested interest in watching the 10-year USTBond yield go into ultra-low territory is all very understandable. Many financial asset prices depend upon a low benchmark bond yield"
"The story will come out soon enough, how the LIBOR rate was rigged extremely low in order to facilitate management of the ultra-low 0% Fed Funds rate, and to enable the IRSwaps to do their magic in keeping down the long-term USTBond yield."

Christchurch rents have shot up but a major leap in demand is "incredibly encouraging" for the city, Earthquake Recovery Minister Gerry Brownlee says
The Grand Poo Bah performs live!
Annette King said she "cannot believe Mr Brownlee can take positives out of this grim situation".....perhaps Annette thinks she can wash away her 9 years of failure by pointing a fat finger at the Grand Poo Bah....
she goes on to blather
"The self-denial and self-delusion from our political leaders is unbelievable.".....which is sooo funny because for 9 long years of uselessness, 'self denial and self delusion' are all Annette King managed to achieve.