Here's my summary of the key news overnight in 90 seconds at 9 am, including news that actually tapering in September may not be as certain as some in the markets believe.
Firstly, US new home sales in July came in 20% below expectations, 13% below the June mark. That was a big surprise.
Then, US durable goods orders data came in lower than expected, down 7.3% in July rather than the 3% fall expected
Together, they suggest the US economy may not be ready for the Fed to start tapering down its bond purchases.
The easing of the tapering threat saw Wall Street rally, up over 15,000 again in early trade but is falling now on Syrian developments. Gold is up, oil is down. US Treasuries rose in price, yields fell to their lowest in a week.
Also, the Fed is resisting calls from the IMF and individual countries to consider them when it does start reducing its bond purchases.
It says it is going to make its decisions based on the US economy's proespects alone.
In New Zealand, we had disappointing data too. Yesterday's trade balance was way larger than was expected, although some of that probably was realignment from the better than expected June result.
More oil imports, less oil exports drove the July result.
We have a NZ Treasury bill auction today for $280 million. Treasury bills are for durations of less than a year, and the August one yielded a tick under 2.5%. The results will be available after 2pm.
The NZ dollar starts today up at 78.5 USc, 87.0 AUc, and the TWI is 74.1.
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3 Comments
Wow ! David....Also, the Fed is resisting calls from the IMF and individual countries to consider them when it does start reducing its bond purchases.
Reading through this I could not help thinking a move toward protectionism by the U.S. was in the process of being drafted....a definitive step away from Globalisation.
Rabo, one of the great dairy credit providers, now saying $ should be used in USA.
Rabobank highlighted the potential for the US to grow dairy exports as New Zealand-based Fonterra. investigating the botulism scare which prompted product recalls, revealed a milk powder withdrawal.
Tim Hunt, US-based global dairy strategist at Rabobank, said that the US "could emerge as a significant competitor" in dairy exports, thanks to a slowdown in domestic demand at a time of elevated international prices. ......
http://www.agrimoney.com/news/rabo-backs-us-dairy-as-fonterra-reveals-m…
What is Rabo's real global strategy.
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