90 seconds at 9 am: China power dims

US factories stumble in August, up in September; China's power generation falls; OECD worries about the EU; markets await Fed; NZ$1 = US$0.818, TWI = 78.5

16th Sep 14, 7:27am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of falling Chinese power generation.

But first, American manufacturing output fell for the first time in seven months in August, but the underlying trend remained consistent with a steadily expanding factory sector. The dip came from lower car manufacturing after a July surge. The pause seems to be over however with the September survey of factories in the New York area showing that output had picked up and was expanding "at a robust pace".

This is somewhat in contrast to China's factory output which stalled in August. And China's power generation declined for the first time in four years, falling -2.2% in August from a year earlier, and pointing to slackening demand from major industrial users. It also helps explain why oil demand is weakening. This fast slowdown has China observers talking up a new round of stimulus from Beijing policy makers

And the OECD said overnight that the countries using the euro are holding back the global recovery. It was positive about both China and India however.

In late Wall Street trade, last week’s retreat was extended today on the industrial production reports from in America and China. Investors are waiting for the results of the Federal Reserve meeting to assess the outlook for interest rates. That news won't come until Thursday however. In the meantime we will get the New Zealand current account result for Q2 tomorrow and our GDP on Thursday. August migration data is out on Friday.

Back in New York, the UST 10yr benchmark bond yield held its Friday gains overnight and closed at 2.60%.

The price of oil moved very little overnight. The US oil price is now just under US$93/barrel and the Brent benchmark is still under $97/barrel. Gold bounced a little from its sharp fall at the end of last week and is now at just US$1,233/oz and off its low for the year.

We start today with our currency slightly higher against nearly everyone although the moves are not dramatic. We are now just on 81.8 USc, at 90.5 AUc, and the TWI is at 78.5.

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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5 Comments

by Henry_Tull | 16th Sep 14, 8:36am 1410813360

Seems it not that hard to latch on to a fibre cable/netwoorks, but to find the needle you have to take the entire haystack.

The New Zealand Prime Minister said he would not discuss the X-Keyscore program, saying "we don't discuss the specific programmes the GCSB may, or may not use".

"But the GCSB does not collect mass metadata on New Zealanders, therefore it is clearly not contributing such data to anything or anyone," Mr Key said.

Fairfax Media has previously reported on the Australian Signals Directorate's involvement in the X-Keyscore program and the ASD's cooperation with Singapore's Ministry of Defence to tap submarine cables in South East Asia.

The Australian Signals Directorate has also acquired sophisticated technology designed to tap high-speed fibre optic data cables including those that connect Australia with Asia and North America. The huge volume of intelligence now collected by the ASD data has required the construction of a new $163.5 million data storage facility at the HMAS Harman naval communications facility near Canberra.

http://www.smh.com.au/it-pro/security-it/edward-snowden-reveals-tapping-of-major-australianew-zealand-undersea-telecommunications-cable-20140915-10h96v.html

and

http://www.smh.com.au/technology/technology-news/forget-the-needle-take-the-haystack-20131205-2yudy.html

The company describes itself as "a world leader in Traffic Visibility Fabric solutions", enabling network managers to achieve "complete network traffic visibility" through "100 per cent packet capture" without impacting on network performance.

by PeakEverything | 16th Sep 14, 11:13am 1410822836

This issues seems to be playing down political lines. If you don't support National you are concerned to be spied on or even the potential to be spied on. If you support National most people say "oh it's made up by Kim dotcom" or "if you are not doing anything wrong you have nothing to worry about. I find it funny the people who accuse the "left" to be communists are the very people who don't want to be spied on by the government.

The pirce of freedom is eternal vigilance. The price of freedom seems to be getting to expensive these days...

by Boatman | 16th Sep 14, 10:27am 1410820074

What a disgrace ! Has anyone seen the picture of the head of AUCKLANDS WATERCARE in the Herald today ?

I am told this fellow earns more than the Governor of the Reserve Bank or the Prime Minister .

Its either a scandal or a bloddy disgrace that the Head of a taxpayer - owned Monopoly which does not need to make a profit and is never held accountable for anything is paid so much .

Its wrong on absolutely every imaginable level .

It leaves one incensed , bitter and angry

by jr19 | 17th Sep 14, 9:05am 1410901531

Yet there is no way to rattle the cage.. so add exacerbated to that list

by PeakEverything | 16th Sep 14, 11:03am 1410822180

Below is an extract from Price Waterhouse Coopers report "Low Carbon economy Index"

"The 2014 Low Carbon Economy Index (LCEI) shows an unmistakeable trend. For the sixth year running, the global economy has missed the decarbonisation target needed to limit global warming to 2˚C. Confronted with the challenge in 2013 of decarbonising at 6% a year, we managed only 1.2%. To avoid two degrees of warming, the global economy now needs to decarbonise at 6.2% a year, more than five times faster than the current rate, every year from now till 2100. On our current burn rate we blow our carbon budget by 2034, sixty six years ahead of schedule. This trajectory, based on IPCC data, takes us to four degrees of warming by the end of the century." http://www.pwc.co.uk/assets/pdf/low-carbon-economy-index-2014.pdf