Here's my summary of the key issues from overnight that affect New Zealand, with news of doubts about the viability of the Glenbrook steel mill.
But first, the US ended the month of March with a Federal budget deficit of $52.9 bln, on track to be -2.7% of GDP and lower than the previous year. Spending rose, but a feature was that tax revenues rose to record levels on an accelerating economy.
China's export sales slumped 15% in March, a shock outcome that deepens concern about sputtering Chinese economic growth. The shock fall hammered the Australian and New Zealand dollars though expectations of fresh economic stimulus from Beijing helped Asian stocks higher.
The FT reported today that Greece is preparing to default on its next IMF payment. “We have come to the end of the road. If the Europeans won’t release bailout cash, there is no alternative [to a default],” one government official is reported to have said. Following the report, the Greek government denied it was their plan.
In Australia, Aussie analysts are questioning the viability of the NZ steel-making facility. BlueScope Steel is burning cash in its Glenbrook iron sands business says Credit Suisse and the operation could lose up to $40 million in 2015-16 if iron ore prices don't recover.
The collapsing iron ore price is making a major mess of the Australian Federal budget. Extra large deficits are coming because there is no political will to cut back spending.
In New York, the UST 10yr yield is unchanged overnight at 1.95%. Local swap rates will likely follow the New York lead.
The US oil price is also unchanged today at US$52/barrel and Brent crude to $58 a barrel. Output in the US shale fields is becoming volatile.
The gold price however has fallen and is now at US$1,199/oz.
The New Zealand dollar will start today much lower on the reaction to the poor Chinese trade data. It is at 74.4 US¢ a whole 1c lower than this time yesterday, still very high against the Aussie at 98.2 AU¢, and the TWI is just on 80.1.
If you want to catch up with all the local changes yesterday, we have an update here.
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