Here's my summary of the key news overnight in 90 seconds at 9 am, including news there are advantages to being far away from Europe.
In the US, manufacturing expanded faster than expected in February, (or here) a sign industry overcame bad weather across much of the country. Similar measures in the eurozone were slightly lower on a weaker German result, although the trend is higher (France is closer to ending its five month contraction, but not quite there yet). In China, their contraction grew. (This China PMI is of smaller enterprises; the official PMI released yesterday was also lower but still expanding and is for large enterprises.)
Worldwide, factory expansions accelerated, hitting a 34 month high although that growth is largely on the back of the strong US data.
In Europe, the Ukraine effect is having significant market consequences. The Russian rouble has taken a very sharp fall and the Russian central bank has raised its benchmark interest rates by 150 bps to try and stem the falls. The Russian PMI is trending down badly.
European CDS spreads have jumped sharply overnight. German gas prices have surged, and some firms there are planning to go off-grid, a move that is worrying authorities.
Back in the US car sales were higher in February. Retail sales (personal consumption spending) in January were up more than expected as incomes grew, reversing the late 2013 trend. However that spending was more for services than physical goods.
In Australia, some of their biggest resources companies could lose a major investor if Norway proceeds with a plan to ban its vast oil-fuelled sovereign wealth fund from investing in coal, gas and, ironically, oil.
The political turmoil has seen equity markets fall in New York, UST benchmark 10yr bond rates fell too and are now at 2.62%, and oil and gold rose in price sharply. Gold has jumped US$30/oz and oil is up almost US$2/barrel.
Through all this, the NZ currency has fared very well avoiding any sharp changes. We start today at 83.7 USc, 93.7 AUc and the TWI is virtually unchanged at 78.6.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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4 Comments
And there goes the March OCR rise!
Isolation has it's benefits.
Interesting the NZD is holding up well. Probably bc of increased inetrest rates coming up.
David, This may have medium term implications for the RBNZ .
Did you see the report from Reuters in Frankfurt overnight that the ECB is concerned that inflation is too low (0,8%) and Draghi wants to further loosen monetray policy?
He appears to be taking steps to do just that.
Europe is still not in a good space at all and one wonders whether there is actually deflation ( by some measurements) in the Eurozone ?
Yet moe cheaper money in Europe finding its way into the NZ$ savings pool could strerilize any RBNZ rate increases here.
"Transpacific Industries Group, the Australian waste management company, agreed to sell its New Zealand business to Beijing Capital Group for $950 million"
Why is NZ waste so attractive that the Chinese, Bush's Carlisle Group, and others wanted to buy it from the Aussies?
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