Here's my summary of the key news over the weekend with news Americans seem to be opening their wallets again, a core requirement for international economic growth.
Most US retailers reported strong sales in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace.
A closely watched consumer sentiment survey reached its highest level in over seven years. Cheaper oil and a strong dollar made it less expensive for Americans to buy imported goods.
In China, police have raided more than 10 underground banks that were together involved in almost NZ$30 bln of transactions as authorities tighten their controls on money laundering over China’s borders.
A NZ-Korea tariff reduction deal has been negotiated that will remove about half of the tariffs for our products into South Korea over a fifteen year period. The deal is similar to ones Korea has negotiated with other countries although we get some sweeteners especially around limited duty-free access for milk powders.
Australia's FTA deal with China is about to be officially revealed later today. Australian service companies are reported to have won unprecedented access to Chinese markets under the agreement which will eliminate more than 90% of Australian exports from tariffs over the next four years. Under the deal, financial services providers will have access to China second only to that of providers in Hong Kong and Macau.
These two deals were announced at the G-20 in Brisbane but they were both years in the making. Little else seems to have been achieved at the G-20.
In New York, UST 10yr bond yields fell back on Friday and are now at 2.32%.
The oil price is holding its lower levels and is now below US$76/barrel with the Brent price just under US$80/barrel.
The gold price however jumped late on Friday in New York and after the London market had closed and is now at US$1,187/oz. The reason for the sharp rise is unclear but it appears to be largely technical
The NZ dollar will start this week at its highest level in a month at just over 79 USc, at 90.5 AUc, and the TWI at 78.3. Bill English said in Brisbane over the weekend that a NZD:USD exchange rate in the "mid to upper 70's" is sustainable for our economy.
If you want to catch up with all the changes on Friday 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
China buying USA milk powder
Australians aren’t the only ones looking to sell more milk to residents of China. Yesterday, one of China’s biggest dairy companies announced an agreement with the Dairy Farmers of America to sell U.S.-produced milk powder in China. Inner Mongolia Yili Industrial (600887:CH) will hold 30 percent of the $100 million joint venture, which will open a plant in Kansas with capacity to produce 80,000 tons of dairy power a year. Zhang Jianqiu, Yili’s chief executive, said the deal should improve the company’s technology and quality management, according to a report by the official Xinhua news agency.
expect Oz FTA news later today
Jones said the promised benefits of the deal, such as tariff-free access to Chinese markets for Australian dairy farmers and wine producers didn't stack up.
"Hang on… China are giving us nothing. The dairy farms are owned by China," Jones cried.
In Western Victoria, Jones shouted, 50 dairy farmers had already signed deals to sell to China. The Van Diemen's Land Company, a big Tasmanian dairy outfit, was also preparing to sell to China.
AU-CNY Free Trade Agreement
Dairy and beef tariffs are expected to be phased out over nine years.
http://www.businessspectator.com.au/news/2014/11/17/china/china-aust-re…
a detailed look, and written from over there on the ground..
makes an interesting contrast to what we see from the dutch bank
although 5% cagr is still a fast clip its not the past free for all.
by domestic industry supply chain we see them guiding local brands use off-shore powder
The last thing the government would want to see is foreign brands benefitting excessively from Chinese consumers’ long standing concerns over domestic food safety by reaping above-normal profits. (this sites server comes and goes depending on time of day) http://www.agrichn.com/NewsData/NewsData.aspx?Nid=SP2014111115510001the two charts show another view as to why Danone are so ropey, and the $ a local processor has been forgoing to date:(.
stepping back, with powder from USA, Europe, maybe Oz, UHT, core from Germany, we suspect less rather than more % volume of dairy would be passing through GDT future-wise.
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