Here's my summary of the key news overnight in 90 seconds at 9 am, including news of rising concerns about China.
There are more signs China is slowing with their weakest start to a year for investment growth since 2001 and unexpectedly slow industrial production. This is adding pressure for renewed economic stimulus just as Premier Li Keqiang has said he wants to avoid such a move.
In America, retail sales rebounded in February, inventories rose - both at levels expected - and new filings for jobless benefits hit a fresh three-month low last week, suggesting the US economy is regaining strength after an abrupt slowdown caused by severe weather.
Late yesterday Australia posted a surprising rise in full-time payrolls in February, the most in more than 22 years. That sent the AUD higher and signaled their economy may be gaining new traction.
In Japan, labour unions said they clinched their biggest raises in years - about NZ$22 per month - following Prime Minister Abe's calls for companies to boost wages to help put the world’s third-largest economy on a path to sustainable growth. Re-embedding modest inflation is their goal.
In Britain, their central bank wants to force lenders to clawback bonuses of misbehaving bankers for up to six years after they have been paid. They have made proposals aimed at preventing industry scandals such as product mis-selling and Libor manipulation.
Yesterday's OCR hike in New Zealand has seen a three early effects; a rush to fix which has pushed swap rates up noticeably, the rising of floating rates which was started by ANZ, then ASB followed broadening the increases to fixed rates as well, and the currency spiked higher.
The market is in transition and if you have the opportunity to fix, you should consider it seriously right now. The wholesale money markets are taking the RBNZ seriously that interest rates will rise significantly 'back to normal' on a steady basis over the next two years and they are pricing in the early rises. The opportunity to fix at the current low rates will close very soon and the more people that move to fix, the faster it will close.
In mid-afternoon trade, the Dow is sinking, UST 10 yr bond yields are down to 2.70%, the oil price is down, and gold is up. New York and Europe are still worried about the Ukraine (the Ukrainians think the Russians are getting ready to invade) and increasingly worried about the China economic slowdown.
Our TWI is at yet another record high of 79.9 - it topped 80 late yesterday - with the NZ dollar at 85.5 USc its highest against the American currency since last May, 94.4 AUc, and 5.25 yuan, its highest against the Chinese currency also since May. The higher currency is clearly a surprise reaction for Graeme Wheeler - he thought his OCR hike was fully priced in. However, he also said we will just have to live with a rising currency.
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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3 Comments
Here is something a tad interesting. Every week the US EIA publishes the natural gas that is available in storage for subsequent use. This years level is the pale blue line in the graph half way down the page (the one that is apparently heading to zero, chuckle):
http://ir.eia.gov/ngs/ngs.html
Fancy that - stored natural gas is at record lows, way below the 5 year averages for this time of year (which rather destroys the bad weather arguement - I believe it comes every year in winter), and heading straight down.
The thing is, the meme on this and on so many other MSM sites has been that the US is literally awash in fracked natural gas.
Funny, doesnt look as though that is the case........
They better find some more to fill up those emptying stores over summer, thats for sure.
Back in 2012 the 'story' was that US natural gas prices were going to keep falling all the way to $1:
http://www.fxempire.com/technical/technical-analysis-reports/natural-ga…
Comments such as this were often repeated on this site (Mr Chaston often banged this particular drum):
''The supply of natural gas is simply far too large in order for the demand to ever come close to exhausting it. The United States and Canada both have been finding more and more supplies over the last year or two, and with new drilling techniques, the amount of available natural gas supplies should only increase as time goes on.''''
And yet here we are. US natural gas prices north of $4, and gas in storage collapsing. Makes you think?
I too, have a beef with Mr Chaston.
Mine is about the continued repetition of 'sustainable economic growth'.
I don't give a rat's behind whether it is the PM of Japan, or Bill English uttering the falsehood - but a falsehood it is.
Until economic activity can demonstrate an ability to be conducted with 100% non-draw-down of physical resources, it is 100% unsustainable.
Time some folk got with the programme. Regurgitating horsepoo is not acceptable journalism. You expect it from the mainstream, which need the advertising revenue to survive, but bare journalism has to be about truth.
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