Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a surging currency.
The NZ dollar raced higher overnight and is now up over 77 on the TWI. The rise was broadly spread ahead of today's current account announcement and tomorrow's Q2 GDP figures. No-one is expecting positive data from these releases because they will be drought-affected but markets are clearly looking ahead.
Overnight, the Fonterra auction results held at their higher US dollar levels, eking out a 0.3% gain. However, with the strengthening kiwi dollar, that translates into almost a 5% decline on the previous auction. Still, in NZ dollars, these auction results are 50% higher than this time last year - in either currency.
Early season milk production is lower this year than last year.
In the US, the latest readings on poverty levels are not good, with the 2012 data showing no improvement last year and a poverty rate of 15%. In 2006 it was 12%. The US poverty income levels are nuanced by family size, but for a two adult family with one child, they are considered in poverty when their 2012 income from cash sources was NZ$19,530 or less. Food stamps and housing assistance are not included in the assessment.
The latest US inflation readings are very low.
The British government is selling down its Lloyds Bank stake, and made a gain of NZ$115 million in this first share sale. Apparently, their government got the investment banks to run the sale fee-free.
China is reported to be expanding its imports of everything related to housing construction, and that is raising demand for shipping - and logs, a NZ export staple.
In Japan, they are worried about blackouts due to critically low power supplies after they shut down their nuclear industry. They are desperate for natural gas and are lucky there is an abundant supply and low prices.
Gold has slipped a little further, even more in NZ$, the Dow is up over 15,500, oil is down to US$105/barrel (pump prices fell here yesterday), and UST 10yr yields are down again to 2.85%.
The NZ dollar starts today at 82.4 USc, 88.1 AUc, and the TWI is at 77.1. its highest level in four months.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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4 Comments
Physicists calculate the size of the shadow banking sector.
https://medium.com/the-physics-arxiv-blog/5e1dd9d1642
The power law technique used is based on a and successfully used technique for identifying fraud.
Oops - best the Fed keep the interest rate curve positive, and stop sucking up the best collateral in town - otherwise multiple re-hypothecated collateralised repo underpinning this so-called shadow banking system will pull down our unveiled local versions.
The NZ dollar raced higher overnight and is now up over 77 on the TWI. The rise was broadly spread ahead of today's current account announcement and tomorrow's Q2 GDP figures. No-one is expecting positive data from these releases because they will be drought-affected but markets are clearly looking ahead.
http://www.financialjuice.com/zerohedge
Thanks Steven for the link. I found this an interesting read as it closely mirrors our own outlook on the future regarding rising interest rates and inflation.
NZer's loaded up with more debt and then the cycle begins... 2008 will be a distant memory when this new event unfolds.
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