Here's my summary of the key news overnight in 90 seconds at 9 am, including more encouraging news from Asia, this time focused on China.
Late yesterday, data was released showing China’s industrial output grew at the fastest pace in 17 months in August, up an impressive 10.4%, and its M3, the broadest measure of new credit almost doubled from July as its recovery gains some real traction.
Even their retail sales numbers beat estimates, up another impressive 13.4%. These new numbers follow excellent export and inflation data released Monday.
Chinese data over the past two days and a softer US approach to the Syria issue have helped credit spreads to tighten globally. And the Dow is up again, currently over 15,170, gold has lost its recent gains and is down to US$1,365/oz again, and oil is also down more than US$2/barrel.
Yields on US Treasury 10yr bonds inched up to 2.93% in late trade in New York.
Here's an interesting benchmark for you. The average fuel economy of new vehicles sold in the United States hit 24.9 miles per gallon in August, a six year high. That's an average 9.4 l/100kms.
However, rising American interest rates might be putting the squeeze on home lending. It is reported to be prompting banks to cut jobs and warn investors of declining profitability in the home-loan business.
In Europe, the long-awaited financial transaction tax may never be implemented, amid concerns by EU legal experts it would be illegal.
And Norway has a new centre-right government, who say - in a move very similar to New Zealand's SOE selldowns - they will move ahead to partly privatise one of their big SOE's, giant Statoil.
In Australia, their financial regulator APRA has warned it's banks not to let lending standards slip in an environment of cheap credit, and is also warning borrowers must be prepared for higher interest rates.
The NZ dollar is starting today up following the Aussie dollar at 80.6 USc, 86.7AUc, and the TWI is at 75.9.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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3 Comments
What is David saying here. # Here's an interesting benchmark for you. The average fuel economy of new vehicles sold in the United States hit 24.9 miles per gallon in August, a six year high. That's an average 9.4 l/100kms.
So they are going into bigger vehicles. Must be the glut of oil from the fracking etc.
Interesting: My lovely new truck is officially about 7.0L /100kms. On the run down to the city I can get about 6.3 - but my beautiful wife does it better with a trailer on. And yes. It is a contest. Around town it's about 9.5L/100km. Very nice.
Rich monkeys more likely to take risks than poor monkeys.
http://phys.org/news/2013-09-monkey-business-primitive-wealth.html
Do you really think "shines" is the right word to describe China's situation???
China tried to conduct a mini-taper of its own to streamling its monetary pipeline which had been so filled with bad and non-performing credit, that the PBOC effectively pulled the switch on new liquidity for over a month. What happened almost immediately after, when rates on ultra short term funding soared to 20%+, nearly destroyed the domestic banking system and resulted in a major slowdown in the Chinese economy. "Luckily" for China, its close encounter with the taper was brief, if quite painful, and following a period of shock, the Chinese central bank had no choice but to resume injecting banks with their daily dose of monetary morphine all over again. This in turn, has brought us to square one: nothing in the local banking system has been fixed, and what's worse, while China has bought itself a few months respite, the dominant old problem of a collapsing credit impulse, as decribed before, in the country with the largest corporate credit bubble in the world, is about to come back with a bang in a few short months. In short: China just did what the US has boldly done so many times before - kicked the can.
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