90 seconds at 9 am: Record crude stocks

US housing markets losing traction; manufacturing expanding in the US and Europe, but not China; US oil stocks at 80 year high; NZ$1 = US$0.858, TWI = 79.9

24th Apr 14, 7:28am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news today is OCR review day.

But first, in the US, sales of new single-family houses in March 2014 were surprisingly weak, coming in 13% below the the same month a year ago, and more evidence American housing markets are losing traction.

Manufacturing is in a good space however, and although the latest April US PMI was stable, output and new orders were up.

Across the Atlantic, the Eurozone factory PMI rose to a three month high and their services PMI rose to a 34 month high. Both measures are recording healthy expansion in April.

The Chinese manufacturing PMI was not positive though, recording another contraction in April.

In case you missed it late yesterday, Aussie inflation came in lower than expected causing markets to push back expectations of an RBA rate rise, and weakening their currency. The China PMI didn't help the Aussie either.

The oil price has fallen again overnight on news the US is stockpiling the most crude oil in more than eight decades - since 1931 - thanks to the shale boom.

In New York, stocks are lower as tech sector earnings are disappointing investors. Benchmark UST 10 year bond yields have fallen 4 bps in trade so far today and are currently at 2.68%.

The gold price is lower at US$1,284/oz although at one stage it fell to $1,280.

All eyes will be on the RBNZ OCR announcement at 9am and we will have the full details.

We start today with the NZ dollar marginally lower against the US dollar at just under 85.8 USc, but higher against the Aussie at 92.5 AUc and the TWI is now at 79.9.

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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Source: RBNZ

Source: CoinDesk

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4 Comments

by MortgageBelt | 24th Apr 14, 8:48am 1398286085

OK, another OCR hike today to help our economy.

And of course banks will not hike their mortgage rates as we have all heard they "already have priced in future OCR hikes" !

This hike will of course suppress price inflation in electricity bills, petrol, council rates, insurance, etc. So the consumer will be a winner here.

And of course the hike will further depress house prices in provincial areas because the regions are booming... so they need a bit of cooling!

by King of the whiners | 24th Apr 14, 8:49am 1398286184

Ahhh yes the US 'shale boom', one of your favorite memes.

Shame US petrol prices just keep on trucking higher off the back of this 'boom' - 13 month high and 4% higher than at the same week last year.

http://www.eia.gov/petroleum/gdu/

Odd how this ' boom' is having bugger all effect on lowering US petrol prices dont you think?

Brent (which is a lot closer to all the other global pricing bench marks than WTI) has been resolutely holding between $105-110 for the past 6 months.

by Andrewj | 24th Apr 14, 8:55am 1398286540

Deflation is looking more and more inevitable.

I was reading the latest report from Beef and lamb and came across this little gem, unemployment is going to be a big problem.

In the first half of 2013-14, the volume of boneless cuts exported almost halved, while the share of carcasses more than doubled, reaching 36 per cent of total volumes exported. These changes reflect a tremendous rise in demand for carcasses from China.

by profile | 24th Apr 14, 2:50pm 1398307833

What shale boom?

Francisco Blanch, from Bank of America, estimates that shale gas and oil have given the US economy an extra tailwind worth 1.9pc of GDP - what he calls the "energy carry" - with effects rippling through the chemical and plastics industries. New investments in ammonia plants are rising at an exponential rate, thanks to natural gas prices that are $4.40 (per BTU) in the US and $15 on Asia's spot market.

The US transferred more than $3 trillion to oil exporters from 2001 to 2008. That chapter is closed. The US is back to where it was in 2000 with an energy deficit well below 2pc of GDP and improving every month, while the eurozone is at -4.4pc and getting worse, and Japan is at -6.3pc.

The US has added 2.5m barrels a day of crude output over the last three years, almost as much as the next three countries combined. America covered a quarter of its oil needs in 2007. It covers well over half today. It has overtaken Russia to become the world's biggest exporter of refined petroleum products, and will soon be an exporter of liquefied natural gas aswell.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10783…