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US confidence high, house prices low; IMF warns on global growth; Aussie job stress; oil price lower; NZ$1 = US$0.849, TWI = 79.4

US confidence high, house prices low; IMF warns on global growth; Aussie job stress; oil price lower; NZ$1 = US$0.849, TWI = 79.4

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a tough job market in Australia.

But first, home prices across the US slowed sharply to a single-digit pace in May on a year-over-year basis, the slowest rate since February 2013, according to the Case-Shiller report. Even though this data is a little old, markets are taking it seriously and it backs up the data we reported yesterday through June.

However, much more recent data on US consumer confidence out overnight painted a brighter picture. Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007. Strong job growth helped boost consumers’ outlook, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations.

Overnight, the IMF warned that sharply higher interest rates around the world could combine with weaker growth in emerging markets to slice as much as 2 percentage points off global growth in the next five years.

In Australia, the AFR is reporting that Australian university graduate employment is the worst in more than 20 years, with only 71% of bachelor degree graduates in work four months after completing their degree. Their job market for graduates is far weaker than in 2012 as university leavers are really struggling to find work.

Also in Australia, their forecasters have given up on the El Nino prediction for the upcoming season. The "atmosphere above has largely failed to respond" they said. A normal weather year is ahead. In fact, our animated rainfall monitor shows New Zealand's winter soil moisture has been tracking at long-term normal for many months.

In late trade today, UST 10yr yields edged slightly lower at 2.48% but that is where it was at this time yesterday. Stocks are falling in late trade in New York after being up slightly earlier. Markets are starting to focus on tomorrow's Fed announcements.

The oil price fell on the US benchmark to under US$101/barrel and is threatening to fall below US$100/barrel. On the Brent benchmark it is under US$108/barrel. Gold is higher at US$1,310/oz.

We start today with the NZ dollar lower again following both the lower Fonterra payout implications and a stronger US dollar. We are now at just 84.9 USc and that's a seven week low, at 90.6 AUc which is the lowest in 2014. The TWI is at 79.4.

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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9 Comments

Problems for NZ ag are here, makes it hard for us to compete in what we do best.

 

http://finviz.com/futures_charts.ashx?t=ZW

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Please expand on why, thanks.

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Animal feed is getting alot cheaper in the world

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Aj  Will be interesting to see what happens next season.  Arable farmer friend in Manitoba was saying due to bad weather there is 400,000 acres of land not planted this year in Manitoba. Saskatchewan has had similar problems but I don't know the figures of unplanted acreage.

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Has the RBNZ intervened in the currency market overnight ?

Or is this long-time-coming  market adjustment to our over-valued Kiwi$?

 

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Has the RBNZ intervened?

Don't think so
NZD slumped immediately on the Fonterra announcement
Then further when the Euro session opened
Recovered slightly off its lows during the US session as the USD strengthened on US news

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Finally .........the NZ$ is being sold by ANZ Bank at under 90 cents to the Aussie$.

Hope it lasts

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"The Bank of England is expected to unveil on Wednesday a plan which may see rule-breaking bankers return bonuses up to seven years after being awarded them, the BBC understands."

http://www.bbc.com/news/business-28556906

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