Here's my summary of the key news overnight in 90 seconds at 9 am, including news there is a lot of talk about the NZ dollar tumbling after the speech yesterday by RBNZ governor Wheeler.
But a quick look at the chart below clearly shows the move, while sudden on the day, was not actually out-of-range. The pullback is small and does not change the trend.
Further it must be said that Wheeler did not say anything yesterday he has not said before. There was no change in policy, nothing new.
Meanwhile, global equity markets faltered on Wednesday as a mixed reading of American housing data took the edge off this year's stock rally, and oil prices fell as the prospect of increased Saudi supply offset optimism spurred by an improving worldwide economy.
Oil is off US$3 per ballel in a sharp fall. Gold too has fallen overnight, down well below US$1.600/oz, currently at US$1,580/oz.
In Europe, there are fresh strikes in Greece, the Bank of England board has rejected its governor's advice to print more money, and there has been a record loss at French bank Credit Agricole. Spain is reported to be taking unusual steps to contain the cost of credit, barring local authorities from borrowing if yields exceed a benchmark. Also, you might like this link.
In Japan, their trade deficit swelled to a record 1.6 trillion yen in January (NZ$21 billion) on oil imports and a weaker yen, highlighting a key cost of Prime Minister Abe’s policies to drive down their currency.
In China, Foxconn is reported to have frozen recruitment as sales of the iPhone slow.
In Australia, electioneering casts a pall over their economy with few policy initatives - but that may turn out to be a good thing, of course.
The kiwi dollar is down a whole cent against the US dollar compared to this time yesterday at 83.7 USc, down 60 bps against the Aussie 81.4 AUc, and the TWI is at 76.5
No chart with that title exists.
11 Comments
Another week, another all time high for US petrol prices (for this time of year), up another 13c on the week:
http://www.eia.gov/petroleum/gasdiesel/
Remember dear friends, each 10c rise in the price of petrol takes $11 Billion out of the US economy; seems as fast as Bernanke prints so just as quickly energy costs suck it all away.
http://www.csmonitor.com/Business/2012/0305/Gas-prices-How-much-will-th…
Darn tooting I just don't understand it, I've been told by all and sundry that the US is just a gushing out with that there shale oil, that the US is going to be renamed Saudi America; what ever can be the problem?
I see that WESTPAC ECONOMIST Nathan Penny is going to be discussing the Strong NZ$ and other issues at a breakfast run by Chartered Secretaries New Zealand next Wednesday , see www.csnz.org
Countries from South America, Asia, Europe, are trying to intervene with their currencies to prevent them getting too strong to keep them competitive. Eveyone wants the same outcome,a weak currency to help exports. If we all intervene then the outcome is the same - no change.
'but that may turn out to be a goos thing, of course"
Actually, David, tha country is between a rock and a hard place, and way behind in making the hard decisions. No way does 'making none' equate to addressing that which has to be addressed.
Funny/tragic to watch - a climate-dependent community, 85-90% coal-fired electricity, coal exporting, makes you wonder. Putting out the fire with gasoline, and complaining all the while of the inconvenience of even a token cost.
Oil has ups and downs but look at the trend since December, also look at BDI over 5 years...its still declining...
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