Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the first signs of Spring are having an economic effect.
In the US, sales of new single-family homes fell more than expected in December, as did new residential construction, but the exceptionally hard cold weather no doubt contributed to these December data. On the other hand, the latest US PMI readings of services activity were bullish, and especially the 'expectations' component.
Also bullish is bellwether construction equipment maker Caterpillar who is reporting strong profit forecasts.
The emerging market squeeze rolls on, although it is becoming clearer neither the US nor Europe expect these pressures to derail their 'progress'. The Turkish central bank has called an emergency meeting of its monetary policy committee for later today following a sharp fall in the value of the country's currency. China, however, is feeling the sting.
Sony's credit rating is now rated as 'junk' by Moody's, in a sign of shifting fortunes. Japan may be making progress in other areas of its economy, but its trade balance is not one of them. Energy imports, in the wake of its nuclear shutdown, are still straining its economy. Its the volume, rather than the price that is weighing on them.
The flip side of rapid urbanisation in China is occurring this week. It is Spring Festival in China - Chinese Lunar New Year - when families get together to celebrate, and that means the number of people traveling in the country will top 100 million per day for the next week - an enormous migration, and a strain on the short-term cash and currency needs of the country.
Back in the US, with the worst of the cold weather probably behind them, gas and oil prices are declining, as is the Brent benchmark.
The UST 10 year bond benchmark yield is staying low at 2.73% this morning.
The NZ dollar starts today also drifting down from yesterday's lower levels at 82.2 USc, 94.1 AUc and the TWI is at 77.7.
According to the latest update of the Big Mac Index, the NZD seems priced about right.
If you want to catch up with all the changes on Monday, we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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14 Comments
Wonders will never cease. From Forbes:
Why Shale Oil Boosters Are Charlatans In Disguisehttp://www.forbes.com/sites/jamesgruber/2014/01/26/shale-oil-charlatans/
Whine on.
.....do you have a problem with it? How about enlightening us.. Someone posted the Morgan read last week....I thought it very interesting with pretty significant implications. Have you read it... got a critique on it?
http://surplusenergyeconomics.files.wordpress.com/2014/01/brief-guide.pdf
Rastus - you seem to have misunderstood my post. I am amazed that a MSM mouthpiece such as Forbes (which is usually the chosen habitat of over-excited cornucopians) should be running a piece which gives a more accurate assessment of the wild claims made to do with all things shale. Tim Morgan has been writing a lot of sense for a long time.
The school run with commonsense not an overblown sense of 'PC gone mad'....http://www.stuff.co.nz/national/education/9650581/School-ditches-rules-… May many more schools be brave enough to follow Swanson Primary.
Agree.
I observed some years ago that when the creche / primary school / parents banned "war toys" that the kids occupied themselves with the same games using sticks of about the right shape or used their fingers and still ran around being cowboys and indians and having great fun. My wife even finally caved in to that one at home and we had nerf bullets everywhere for some years, she even joined in and had fun.
"cotton wool" is I think a disaster. As is trying to ensure kids dont fail, everyone fails its making sure they can handle it and get back up afterwards and have another go as failure is no biggee thats important.
regards
Turkey Crisis?
Jeez , its not just Turkey , has anyone been watching the BRICS currencies in the past few weeks ?
Brazillian Real , Russian Rouble , Indian Rupee , South African Rand ..... all taking a bath , like a big dirty Ganges sized bath in the middle of Monsoon time .
Only China seems okay .... for now at least
and the BDI, over its xmas rush drops back to its lows...
http://www.bloomberg.com/quote/BDIY:IND/chart
So if the recovery we were having apparantly signalled by the rise (DC always commenst on its rise) , is gone...now what?
regards
Interesting note on the latest buzzword - income inequality, form the usually sober Atlantic Monthly.
US-centric (whodathunk) but ah do b'lieve that the results are reasonably universal.
A quote:
" the researchers found that racial segregation, income segregation, and sprawl are all strongly negatively correlated with upward mobility. But what might surprise is that it doesn't matter whether the rich cut themselves off from everybody else. What matters is whether the middle class cut themselves off from the poor."
So -
1) ferget the 1%. No-one is evah gonna make the leap from whatever class, into their august and godlike presence. They are a populist distraction, not to say abstraction.
2) worry more about the middle class.
RTWT, it's not a long article, but evidence-based.
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