Here's my summary of the key issues from over night that affect New Zealand, with news of a resurgent Japanese economy.
But first, five of the world's largest banks, including JPMorgan Chase, Citigroup, UBS, RBS and Barclays were fined NZ$7.8 bln overnight in a multi-country penalty, and pleaded guilty to American criminal charges over manipulating foreign exchange rates. NZ$3.4 bln of that was a fine imposed by the US Justice Department. Total fines in the affair now exceed $13.7 bln. But that is just the start. What these guilty pleas do is open the way for easier civil suits by affected parties, mainly by pension funds and fund managers.
Minutes released today show that the US Fed thought it would be premature to raise interest rates in June and that a small rise in inflation was being offset by a weaker labour market and other softer data. A June rate hike seems unlikely now, but the tone suggests they do want to raise rates soon. Their next meeting is on June 18 NZ time, a week after the next RBNZ Monetary Policy Statement.
Japan surprised markets overnight by reporting Q1 GDP growth much higher than expected. The figures support the official view that their economy is recovering, and growth in corporate profits is leading to pay raises for workers and greater consumer spending. Abenomics might be working after all.
The Australian mining industry has woken up today to news that China is investing about $50 bln in their rival Brazilian suppliers in a game-changing commitment.
Back in New York, the UST 10yr benchmark yield held its recent gains, rising marginally again and now at 2.26%.
The US oil price rose slightly in trading today and is now at US$59/barrel, while Brent crude is at US$65/barrel. Lower US stock levels motivated the change.
The gold price is marginally higher too at US$1,210/oz.
The New Zealand dollar starts today lower against the greenback at 73.1 US¢, holding against the Aussie at 92.7 AU¢, and at 65.9 euro cents. The TWI-5 is at 76.8.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »
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20 Comments
The Australian mining industry has woken up today to news that China is investing about $50 bln in their rival Brazilian suppliers in a game-changing commitment.
Another game-changing news announcement from the lucky country may have relevance here.
National Australia Bank Ltd. cut the discount it offers on mortgages to landlords amid a regulatory crackdown on lenders to cool the housing market.
Even with official home loan rates at the lowest in half a century, banks extend discounts of as much as 100 basis points to woo clients, according to broker Mortgage Choice Ltd. Read more
[Silly rant removed. Ed]
Valid questions are not a silly rant, some of the posts below ask the same Silly Questions in a different way. A rant as you put it, were all valid questions on the subject.
Even 3 people were in agreement, before you could impose your Editorial will.
It may be your site, but not everyone agrees with your editorial points of view.
But as usual free speech is not free, when seen in the real light of day.
It can cost as we both know.
Another question..
Will the Hype be extended to the Energy Sector.
It is not just Petrol Heads that should roll.
http://www.bloomberg.com/news/articles/2015-05-20/hanergy-thin-film-pow…-
Just another example of too much central bank issue chasing "cheap" opportunities.
Europe’s junk-rated companies are raising funds for mergers at the fastest pace in at least six years.
Buyout deals accounted for 61 percent of the almost 24 billion euros ($26.6 billion) of leveraged loans issued this year, the biggest proportion since the same period in 2009, according to S&P Capital IQ Leveraged Commentary & Data. Companies are also funding deals in the bond market, where sales are set for a record, according to Fitch Ratings. Read more
Private property rights depend on a robust judicial system to protect those rights. Mr Hager documents how the system can be manipulated by the big guys to fatigue the small guys.
http://www.nickyhager.info/crosby-v-hager-defamation-proceedings-as-pol…
I think he played the wrong strategy as they still achieved their objective. With a lawyer that works pro bono I would have done only enough work to ensure a successful path to the appeal court, a strategic loss so as to up the stakes and a real test for the veracity of the claims.
I am a tad confused. Yet again multinational banks have been found guilty of widespread and pervasive criminality. And yet again not one of the people involved at these banks has received a custodial sentence. The banks have merely been fined - and no doubt they will simply increase their charges to the public in order to 'socialise' their penalty (in fact one of the Banks involved is already taxpayer owned, so they don't even have to go through that mechanism of fleecing the public to regain their 'lost' capital).
On the basis of this anyone who hasn't concluded (given the events of the last decade) that neo-liberal capitalism is an abhorrent and failing system is an idiot.
Not sure why a custodial sentence is warranted. is their physical proximity to other people a threat? If not, then a more creative form of punishment is called for, I think.
Put them in jail, and the taxpayer keeps paying for their upkeep.
Nope: fine them to the hilt, and forbid them from working in a financial environment. make them pay into a restorative justice fund, maybe.
In any case, bankers only care about cash, so making them pay cash is how you punish them.
MB, DC has missed that these plea bargains are designed by both sides, not to make civil actions easier but to avoid trials where evidence is tendered - THAT would make civil actions easier. Likewise criminal proceedings against individuals (which has never happened re. GFC - they went after Madoff with gusto, and rightly so, because he was not a member of their bankster club, the cheek of the man!)
Asia Unhedged thinks there’s lots to counter notions in the U.S. media that almost everything China does these days is to avert an economic slowdown.
http://atimes.com/2015/05/why-chinas-working-on-the-railroad/
"Barclays were fined ....overnight in a multi-country penalty, and pleaded guilty to American criminal charges over manipulating foreign exchange rates"
30 years on, and they were still doing it at Barclays?!! And we wonder why no-one trust banks these days...
"Business was put through de Fries, a foreign exchange dealer at Barclays Bank Australia. De Fries and Koval jointly owned the New York bank account into which profits flowed. ...."It was an Australian corporate scandal from the 1980s.. de Fries was sentenced over the AWA transactions and placed on a five-year bond, court records show."
http://www.smh.com.au/business/whizturnedrogue-sentenced-in-belated-seq…
Where the money is coming from
The continuing saga of the $39 million Point Piper mansion Villa del Mare, a transaction made via a series of shelf companies to avoid the foreign ownership laws
It now transpires it gets tipped into a vacuum tube funded by a state controlled bank in China, in the form of bail-out money, changes hands a few times, then pops out in Sydney, purchasing expensive property
The movement of funds from China, will continue to have a ripple effect on the housing markets of Sydney and Melbourne, and the ripples are widening
http://www.smh.com.au/comment/the-weight-of-chinese-money-adds-to-the-c…
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