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90 seconds at 9 am: Bail-out deal agreed for Greece; French jobless rising; OECD cuts growth forecast for 2013, raises it for China; NZ$1 = 82.1 USc

90 seconds at 9 am: Bail-out deal agreed for Greece; French jobless rising; OECD cuts growth forecast for 2013, raises it for China; NZ$1 = 82.1 USc

Here's my summary of the key news overnight in 90 seconds at 9 am, including news EU ministers say - after three years - they have finally reached a deal on the Greek debt bailout.

The agreement means euro zone ministers have unlocked loan installments for Greece that total €44 billion (NZ$70 billion). But whether this is real progress, or another mirage, is hard to tell - within minutes of the announcement commentators were dismissing it as another exercise in "kicking the can down the road". Time will tell, though.

Generally, things remain tough in Europe. French jobless claims jumped to a 14-year high as a stalled economy prompted companies to trim payrolls and investment. And the OECD cut its economic forecast for 2013 to 1.4% growth from 2.2% and said that failure to resolve the euro debt crisis and the US budget impasse could trigger a global downturn. They do see China expanding faster though, achieving growth of 8.5% next year, and almost 9% the year after.

In the US, companies increased their orders for machinery and equipment by the largest amount in five months. Surveys of home prices and consumer confidence, which jumped to a 4 year high, also offered more signs of optimism.

The NZ$ starts the day little changed at 82.1 USc and the TWI is at 73.5

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8 Comments

"they do see China expanding faster though, achieving growth of 8.5% next year, and almost 9% the year after".
 
Sort of linear reporting, wasn't it?
 
Off what base, compared to what, and is it GDP, which is a nonsense anyway?
 
Just watch the energy consumption, to work out what is really happening, in China or anywhere. Eh David? So much more reliable a measure than tea-leaves, or uncompared exponential numbers.

One of my current 'hobbies' relates to the collection of photos-from-space of mothballed ships. Thousands of them!
 
These ships were not-that-long-ago in constant demand.
 
The 'Recovery' leaves them rusting away on permanent moorings - by the thousand. 
 
The Baltic Dry Index also makes very solid statements about the size of the 'Recovery'. Warning on BDI. Always have a graph that goes back to 2005 in order to see the true state of global trade.
 
Your point is 100% worth making PDK.

Interesting comment on the gold standard and austerity looking at a real world example, the 1920s.
http://krugman.blogs.nytimes.com/2012/11/27/twenties-tales/
One thing I didnt see any correction for were other "advantages".
1) was the advantage of an Empire that the UK had...it could suck in "good" from all over the globe.
2) I'd assume the UK had a far bigger and more dynamic industrial sector/base than france.
3) It still had a large coal production/reserve  (not sure on France)
regards

It is now becoming almost bizarre that the union, achieving ( or surviving) little more than a confidence vote through the pakckage to Greece can even suggest progress in recovery to be underway.
“I very much welcome the decisions taken by the ministers of finance,” ECB President Mario Draghi said. “They will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece.”
reduce the uncertainty ...? wow ! , line up and throw money at that, reduce it from what Guaranteed to Fail to Almost Guaranteed to Fail....now there's a ratings improvment for S&P to salivate over.
Strengthen confidence...bad analogy i.e. ...It's a dead duck.!..might not be..?, could be resting , kipping on it's back.
La Garde and co still trying to get the tightfisted Dutch n Fins to forgive a little, heartless bastards, but they know their ducks that's for sure.

LOL, Greece, LOL
how can you keep a straight face and say that DavidC?
regards

The BBC are reporting that the Eurozone Finance Ministers also wrote off 40 Billion Euros, which I believe, under their treaties and constitutions, is illegal; small matter no doubt.
Ergophobia
 

NZ$ to stay higher
Just in from BNZ:
NZD/JPY forecasts revised higher
We have revised up our NZD/JPY forecasts for the next 18 months. We now see NZD/JPY at 70.50 by year-end (previously 66.40), with the cross expected to remain around this level through to December 2013 (previously 67.00 in June 2013, falling back to 66.00 by December 2013). From there, NZD/JPY is expected to gradually trend lower through 2014. In practice, this would imply NZD/JPY moving from the reliable 58.00-69.00 range of the past three years to a higher 62.00-72.00 range.
These revisions are a direct result of a change in our view on the JPY. Our NZD/USD forecasts remain the same (0.8200 by year-end). The below note from our NAB colleagues explains in detail the rationale behind our weaker JPY view. In essence, we see a new-look Bank of Japan (BoJ) Board pursuing inflation objectives much more aggressively next year, including via direct measures to weaken the JPY. A more dovish BoJ Board would add to the expected JPY headwinds from a deteriorating balance of payments position and higher US bond yields.
We flagged in July that our NZD/JPY forecasts looked a little low based on our terms of trade adjusted PPP model (which suggests long-run ‘fair-value’ is around 82.00). These latest forecast revisions bring us closer to what this long-run model suggests.

We flagged in July that our NZD/JPY forecasts looked a little low based on our terms of trade adjusted PPP model (which suggests long-run ‘fair-value’ is around 82.00). These latest forecast revisions bring us closer to what this long-run model suggests.
Well in that case you'd better scratch any long run fair value Japanese tourist or investor then , because I doubt they'd agree on the fair component or the value.
Can you smell anything Alex...? I think the boiler is acting up again. 

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