Here's my summary of the key news overnight in 90 seconds at 9 am, including news of accumulating dairy commodity price drops.
This morning's GlobalDairyTrade auction saw prices fall another 2.6% in US dollars and about the same in NZ dollars. This is the fifth consecutive fall from the previous auction two weeks ago. Compared with a year ago, prices are down 20% in US dollars, down 25% in New Zealand dollars.
They are now at their lowest level in New Zealand dollars since February 2013. The falls are slightly smaller for cheese, larger for wholemilk powders.
American consumer inflation was up in March as they paid a bit more for food and rent, adding to signs that demand is improving. US prices are up +1.5% over the past 12 months.
Janet Yellen and the Fed are pushing on with tougher leverage rules and want them focused on the big banks. They confirmed the Volker Rule regulations last month. The Europeans and the BIS are following with overnight actions. Those big banks don't like what is being imposed.
Meanwhile in China, lending is falling quite substantially, down almost 20% from a year ago. This is despite economic expansion which is expected to be announced tomorrow at +7.3% from a year ago. That is quite a slowdown however from last years +7.7% level.
In Australia, they are finally about to get the austerity budget they have been putting off for decades. The new Federal government plans to raise taxes and charges in their May 13 budget, as well as cut spending, as it scrambles to rapidly return to surplus. Sources say there will be “nothing pretty” about the revenue increases, and they will be made in an environment where there is little scope to make welfare spending reform.
Gold fell sharply overnight, back under US$1,300 briefly, although it has just moved back above that level. That is a 2.3% fall and similar to the 'white gold' movement, ironically. The oil price is down a fraction today, and equities are up in mid-afternoon trade. The benchmark UST 10yr bond yield is down, now back 3 bps at 2.61%.
We start today with the NZ dollar lower at just over 86.4 USc, 92.4 AUc and the TWI is at 80.2.
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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6 Comments
Good news? Some were picking larger gdt reductions.
See the Herald for in China dairy & trade reporting.
They cut volume so price falls are worse than apparent.
Where do you think they will mark opening price for next season?
If hsbc are right with thoughts of fx, and oecd view on powder price then above 7 would be a struggle?
Banks I've spoken to are requiring budgets to be done at $6.25 for next season. While expectations are high for a payout closer to $7 next season, it is the following season where they are picking it could be around $6.30 and unlike early next season, no big carryover payments from the previous year.
Banks I've spoken to are requiring budgets to be done at $6.25 for next season. While expectations are high for a payout closer to $7 next season, it is the following season where they are picking it could be around $6.30 and unlike early next season, no big carryover payments from the previous year.
Some cheary-beary thoughts about Eduumication.
Some guy called Chang over at Forbes makes a big call: the headline is China Property Collapse Has Begun.
Good commentary on the current political situation - US-biassed but applicable here too: "Many people — not everyone to be sure, but many — are finding their belief in the political elite — the cultural, social and political authority figures — at an ebb. They want to believe, they just can’t."
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