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US May retail disappoints; Iraq jolts oil, gold, stocks; China stress control; NZ swap rates jerk higher; NZ$1 = US$0.868, TWI = 80.8

US May retail disappoints; Iraq jolts oil, gold, stocks; China stress control; NZ swap rates jerk higher; NZ$1 = US$0.868, TWI = 80.8

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of sharp local wholesale swap rate rises.

But first, American retail sales rose less than expected in May and first-time applications for jobless benefits increased last week, but the data did little to alter views their economy is regaining steam.

Those retail sales gained only +0.3%. While that was below the +0.6% rise expected by the markets, April sales were revised higher helping to keep growth forecasts intact.

The oil price climbed to an eight-month high and New York stocks slumped as violence escalated across Iraq. The gold price zoomed higher and is now at US$1,274/oz.

In Britain, the regulator is getting new powers to cap loan-to-income ratios applied by banks for mortgage lending.

In China, new data out for 2013 shows that at the end of the year, more than one in five 'homes' were vacant - almost a staggering 50 million units. It shows the breadth of their housing frenzy. No supply problem there, just rampant speculation.

Also, new data out overnight confirmed that China's so-called mini-stimulus is currently in full swing.

UST 10 yr yields fell overnight on the weak US data and deteriorating Iraqi situation. But it was actually a minor fall to about 2.62%.

However, NZ swap rates rose sharply yesterday, and one and two year rates are suddenly at their highest since July 2010. Our mortgage rates are about to ratchet painfully higher in response. Yesterdays hikes re-established the long up trend that began in mid 2012.

On the exchange rate the NZD has also risen again overnight - and quite sharply as well - following the RBNZ decision. It starts today at 86.8 USc, at 92.2 AUc and the TWI is at 80.8 and up 100 bps in a day.

If you want to catch up with all the changes from yesterday we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »

Daily exchange rates

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End of day UTC
Source: CoinDesk

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8 Comments

Will be interesting to see at which point the NZ growth rate starts contracting. And in which quarter NZ achieves a negative CPI. 

John Key will hoping our economy contraction will not kick in before the election.  He will probably just squeak in before we face our RBNZ self induced contraction.   

 

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Probable, yes. I think we'll stagger along maybe for years until we see a big external event.

regards

 

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I said last year, when National passed the law letting them arrest people at the border over student loan debt, that they had lost my support. This story from the US is why

http://abcnews.go.com/US/wireStory/woman-jailed-truancy-fines-found-dea…

If the state is going to engage in commercial lending (and the Nation's student loan debt is a budget "asset") then it has to use the same recovery tools or prudential lending practices as other lenders, not use the states power to incarcerate people.

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Yes, DH, I totally agree.  StudyLink , a Govt body, dishes out these student loans without  fully informing the student borrower or putting them through a credit check as any commercial operator would for a 30k loan.  

Now we have State power over aggression on student loans. 

And where is the university accountability to those students who cannot use their qualification for real world work in their field of study?

IRD could easily trace students via their families, but they refuse to deal with the families.  And make it very difficult for overseas based borrowers to contact them. 

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Second point, it is not up to the Uni but the student to decide whatis needed for their career and life choice.  A University isnt a polytechnic offering a specifc course ie "trainee plumber" only for the now qualified trainee to find that the qual isnt recognised so cant work.  Also in say a recession fewer jobs are about, such a recession isnt caused by the UNi, maybe by the Govn, sure.

First point, I agree with BTW, this is a commercial or civil issue, hence not criminal and thereofre I fail to see how the state can justify such an action as a arrest.

regards

 

 

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So Libya falls short, iraq already short now looks worse, yet we are supposed to have some millions of BPD reserve, and available but the price climbs. So either there is no reserve, or no one wants to put it on teh market, whcih given the need for incoem I find difficult to believe.  Oh and the USA shale oil boom has some millions extra in the market and still the price climbs.   Wide spread middle east riots look on the cards.

hmmm.

regards

 

 

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Sanctions against Iran will be relaxed.

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Hmm, though looking at y-on-y there is no desernable (out of the ordianary) spike,

http://oil-price.net/

Wait to see if there is a panic, maybe when we go past $120...

regards

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