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90 seconds at 9 am: US productivity rises as does trade deficit; ECB and BofE hold; food prices fall; good Aussie data; NZ$1 = US$0.827 TWI = 77.9

90 seconds at 9 am: US productivity rises as does trade deficit; ECB and BofE hold; food prices fall; good Aussie data; NZ$1 = US$0.827 TWI = 77.9

Here's my summary of the key news overnight in 90 seconds at 9 am, including some catch-up news after the Waitangi Day break.

The fast shift into smart manufacturing is seeing significant rises in US labour productivity. They climbed at an annual rate of +3.2% in the Q4 2013. Their latest data on initial jobless claims came in significantly below a week ago, and below market expectations.

The US trade balance widened somewhat in January as imports grew but exports fell.

New York equities are up strongly in mid-day trade, benchmark UST 10yr bond yields are up to 2.70%, oil is up marginally and gold is down marginally.

The European Central Bank has held off from cutting rates, keeping its benchmark rate at a record low of 0.25%. It has rejected action on deflation now although it signaled that it may respond as early as next month.

The Bank of England, in a similar monetary policy review, also sat on its hands, keeping all its settings unchanged.

World food prices fell in January according to the UN's FAO, the first decline in three months as lower prices for grains, sugar, and meat outweighed stronger prices for dairy products. Demand for all dairy products remains firm, especially from China, North Africa, the Middle East and the Russian Federation where there is big demand for butter. Interestingly, world food prices at the end of 2013 were at their lowest year end since 2009.

In China, it is coming to the end of their Spring Festival holiday, but snow storms are nearly locking down travel. The cold snap that is affecting the US is also occurring in China causing return-home plans to be delayed.

The Aussie trade balance has moved into a surplus on the back of strong grain exports. And Australian retail sales over the Christmas season were stronger than predicted.

In fact, Aussie business confidence is rising and is at its best levels in 2½ years, according the the NAB quarterly survey out yesterday. Australian businesses were anticipating a marked pick-up in activity and investment in coming months.

John Key is in Australia today and apparently tackling the Aussies over Woolworth's 'Buy Australian' campaign, claiming it contravene's the CER deal. Woolworth's owns the Countdown chain in New Zealand, a major outlet for bulk Australian products especially their home brand products. Woolworths is trying to cast the policy as a 'buy local' fresh produce campaign, ignoring the wider aspects.

The NZ dollar starts today up nearly 1 USc from this time on Wednesday at 82.7 USc, up to against the Aussie 92.2 AUc and the TWI is now at 77.9.

If you want to catch up with all the changes yesterday, 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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22 Comments

So Woolworths owns Countdown

So we all should support a move to New World/Paknsave.

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Foodstuffs should set up in Australia and break the supermarket duoploly.  (for the same reason we need another major player here also)

Australian supermarkets are pretty poor so they should do well.  

A NZ owned supermarket could be a good conduit for NZ into the Australian market.

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Chris-M they will be about as welcome as a pork chop in a synagogue, just like the Warehouse. That is the difference between here and Oz, watch Countdown's figures not be affected one iota by this in NZ.

We are really pretty pathetic when it comes to this stuff

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I have supported NZ for a long time but I do notice that in a lot of places where clearly there is room for just the one supermarket that Countdown has a large footprint. I am currently in Katikati and have been forced into Countdown a couple of times, but after this I will find an alternative somehow. 

Already have with fruit and veg so I will put a plug in for the fruit and veg place just a few hundred metres into the 100k zone out of town heading toward Tauranga. One of the best I've been in.

I would add that people turn things over and check the back of things, you could start with your frozen veg that bears a certain Scottish name, again, which is an Australian brand.

So not only do we have Australian supermarkets, they fill their shelves up with Aussie goods.

I wonder if the Homebrand stuff here will be Aussie stuff as well, as I imagine most of it comes from the same place?

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I am surprised the Green Party has not got some publicity from this and organised a Boycott of Countdown . Have they lost their Mojo?

They can  :-

  • rent a crowd
  • start a protest
  • Open a Facebook page
  •  March up ( or down ) Queen Street
  • And get miles of publicicity from this
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The estate of the former Labour MP Peter Tapsell has sold 698 hectares in Ruatoria to a company called Ingleby NZ a Swedish owned company.Iam waiting for the Labour and Green parties to be all over this.

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We have pathetic rules against it and until such times as we tighten up considerably, sadly, this sort of thing will keep happening

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Why is it "the people", the "hoi poloi", keep giving lip-service to this issue, yet when it comes to election time they vote for the status quo - wont vote for the one person who will make a change

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Seems enough is never enough for some people.

Not enough money, not enough land, not enough drugs will keep em from killing each other.

But the problem is, we import them here, so our people cannot ever buy a simple farm of their own, anymore. 

What an example to set.

Has all the makings of a Hollywood film.

Greed, Drugs, Filthy Rich. Death and taxes.

Maybe Mr Key could get his Corporate cronies to cough up for the funds, along with our taxpayer largesse, or maybe ICL and their parents could just fund the whole lot out of Corporate greed.

Either way....what an example of how the rich behave, towards each other.

Kiwi ingenuity. No8 wire and the backing of a cardboard company.......Classic.

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sometimes you wonder how much land is left to sell

 

http://www.stuff.co.nz/business/better-business/9696719/Shepherd-wrongl…

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Know a young chap who worked on one of their organic farms.  Loved it and enjoyed working for them.  Was a very remote property and wouldn't appeal to everyone.

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Whilst we run a trade deficit we have to borrow or sell assets to fund our interest bill of ~ $ 10 Billion / annum and rising as compound interest dictates.

 

So before you criticise foreign investment ie assets sales you had better suggest  how we should fund our interest bill.

 

Right now with debt up to our eyeballs  of ~ $ 250 Billion gross   or net  214 % of our exports according to Fitch - we have pretty much exhausted the borrow and pray strategy we have used for the last 45 years.

 

Interesting to see our interest rate for 10 year Governmant stock  now lies only behind Greece and Portugal of the developed nations. We have " overtaken " Iceland, Ireland, Spain, Italy in the last year to now lie a strong third. The first  two are effectively insolvent having received a Euro  78 Billion bailout last year so they could pay their interest bill. All on the FT web site.

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Another fudging the meanings of investment and ownership. So at what point do you suggest we do something to avoid becoming tenants in our own land, when?

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We should stop spending so much and borrow less. Rockstar economy run on borrowing money and selling OUR assets to overseas buyers.

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We are obviously in the current position because of a lax attitude by governments to investment since Muldoon and the Doouglas reforms(?)

Sometime somebody has to say "NO MORE"

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That will only happen when there is a financial crisis. While key & co maintain the shrewd small-target "steady as she goes" no sudden change policies, that isnt going to happen any time soon 

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Most ‘Medieval’ Speed Read

1) Asset prices depend on credit creation and expansion.

2) The U.S. and other countries create less credit from the public standpoint as their deficits decline.

3) 3–4% credit expansion in the U.S. may not be enough to maintain 
3% growth, especially if asset prices go down and velocity is affected.

4) Don’t be a pig in a highly levered global marketplace. 
There is risk out there.

William H. Gross 
Managing Director

 

http://www.pimco.com/EN/Insights/Pages/Most-Medieval.aspx

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That's saying it like it really is

Interesting comparison in editorial policy

Business Spectator is heavily moderated - pre-publication

Only about 1 in 5 comments ever make it through

Probably because the proprietors are locals and not migrants

Like someone we know

The comments are a lot more substantive

Not much emotive stuff

But then, inflamatory non-factual stuff wouldn't make it past the editors desk

Much more awake to what is going on, and how it's done

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Rupert Murdoch isn't really a 'local' anymore. Business Spectator is owned by News Corp.

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Yeah, but the original locals are still there wearing a set of handcuffs for at least another year. I think old Rupe's got bigger things on his mind, and he's non-racist, considering he was married to Wendi Deng

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