Here's my summary of the key issues from overnight that affect New Zealand, with news of a new round of tax cuts in Hong Kong.
But first, new American single-family home sales fell less than expected in January and supply rose to its highest level since 2010, hopeful signs for a sluggish housing market.
Although the data for the latest HSBC China PMI came in at a four-month high and the related Manufacturing Output Index is at a five-month high, these indicators are little to cheer about. China's factories are just marking time but the data was better than markets were expecting.
Chinese consumer sentiment remained close to record lows in February with confidence around personal finances dropping to the lowest level since December 2011. The Westpac-MNI China consumer sentiment indicator fell in February from January although it was still markedly positive. Despite stabilising in recent months it is close to the record low seen in September 2011. According to Westpac the latest figures show that the Chinese government’s mid-range stimulus actions are yet to make a material impact on everyday life and further policy response measures are expected.
In neighbouring Hong Kong, the government there unveiled a NZ$6 bln package of relief measures including deeper tax cuts and handouts aimed at easing the financial burden of residents. The measures come just weeks after the city’s long pro-democracy protests that ended in December.
The Greek finance minister admitted on Greek radio overnight it will struggle to make debt repayments to the IMF and ECB this year. It also looks like it is reneging on privatisation plans it committed to on the weekend. And Germany's finance minister voiced open doubts (on German radio) about Athens' trustworthiness.
And in Australia, wage growth there has fallen to its slowest expansion since the current data on it started to be collected in 1997. And the latest reading of Australian consumer confidence doesn't look too flash either especially for 'spending intentions'. The chances of an Australian rate cut are growing. The next RBA review is next week.
The UST 10yr yields fell back again in New York and are now at 1.98%. We start today with our swap rates for terms 2 - 10 years lower by another -2 bps.
The crude oil price is also unchanged at just under US$50/barrel with Brent crude just under US$60/barrel. American crude storage data shows another big jump.
The gold price however is up and now at US$1,205oz.
The New Zealand dollar has recovered yesterday's falls is now at 75.4 USc, at 95.5 AUc, and the TWI is back up to 78.5. The most likely event today to move our exchange rate will come from Fonterra. Markets are expecting them to hold their $4.70 payout indication. Variations from that could well be market movers.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with event risk is by following our Economic Calendar here »
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4 Comments
As the drought here in NZ chugs along, things get very much worse down Sao Paulo way:
http://www.independent.co.uk/news/world/americas/brazil-water-shortage-…
''Professor Decio Semensatto from the Federal University of São Paulo has likened the current water situation to a "semi-desert".With the water crisis likely to last for years, Semensatto sees the testing of solutions as "training for the next few years, which will be worse".He holds water utility Sabesp responsible; it has known for years that drought-like conditions would soon arrive, but took few preventative steps.''
Climate change+deforestation+political and public myopia was never going to end well, but perhaps we could learn a few lessons?
Meanwhile in the good old USA it is turning a tad dry as well:
http://droughtmonitor.unl.edu/
and it is winter there......
Not only is the Anglo-American Axis terribly wasteful and inefficient in the utilization of these energy resources, which Russia possesses in great abundance, it expends considerable amounts of time and energy, money and capital in the process of further acquisition of the hydrocarbon fuel needed to maintain sole superpower status. Herein lie the seeds of its own destruction, for the Anglo-American Axis can no longer bear the costs necessary to maintain its empire. The extent to which war and other forms of conflict have been relied upon to secure additional sources of oil and gas no longer makes sense.
An article on Putin worth consideration. http://stateofthenation2012.com/?p=8159
Would it be imprudent to note NZ saw value in negoitating an FTA with Russia and others up to a year ago?
The Government has been negotiating a Free Trade Agreement with Russia, Kazakhstan and Belarus for the last three years and Mr Groser has reported making good progress on it in Moscow over the last few days, Mr Key says.
"Obviously in light of the developments in the Ukraine over the last few days, I can't rule out that there may be some impact on the timetable for concluding the FTA," he says.
"While a delay would be disappointing, we take our international responsibilities seriously and intend to respond in a manner that is in line with the countries who share our values and perspectives." Read more
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