Here's my summary of the key issues over night that affect New Zealand, with news there is a deal between the US and Iran, finally finalised.
But first, American retail sales unexpectedly fell in June as households cut back on purchases of cars and a range of other goods, raising concerns their economy may be slowing again. Markets had expected +0.3% growth, but instead they got a -0.3% decline for the month. Perhaps reflecting this, small business optimism fell as well in a survey out overnight.
In Australia, the slowdown in China and other concerns about global growth have failed to dent business confidence there, according to the NAB survey for June. It shows a solid pick-up in both sentiment and conditions, one that is broad-based across most industry groups. A notable exception however is retail.
Later today, China will report its Q2 GDP and that is expected to be weaker than we have been used to hearing - less than a 7% annual rate. Whether that is a portent for their new growth track is up for debate; the Chinese leadership is certainly talking things up overnight. But the damage they did recently to their equity markets will be long-lasting.
In New York, the UST 10yr yield benchmark stumbled slightly following the weak retail sales data; it is currently up to 2.40%.
Oil markets are however inching higher. The US benchmark price is now just above US$53/barrel, and Brent crude is just above US$58/barrel. The long awaited US-Iran deal was agreed overnight to general applause - except in the US Congress and Israel. Confirmation by the US may be a stormy affair. Sudden output increases flooding markets also seems less likely.
The gold price is down again, now at US$1,154/oz as general risk levels fade.
The US dollar took a small hit from the retail data. We are range-bound against all other pairs. We start today lower at 67.1 US¢, unchanged at 90.1 AU¢, and marginally higher at 61 euro cents. The TWI-5 is still at 71.6.
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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12 Comments
So the U.S. appeases Iran which increases the risk of Iran completing their nuclear weapon program. And then move to implement their mission statement which is to erase the Jews and Israel from the map.
http://www.theatlantic.com/international/archive/2015/03/Iranian-View-o…
Reminiscent of the 1930s
Hmmm - the reality of debt is causing some in the most unlikely sectors to call a halt.
The Bank of Canada should hold off cutting interest rates to avoid sending rising home prices even higher, risking a correction later, said the head of Royal LePage, the country’s largest real estate services firm.
“It seems premature to ring the recession alarm bells now, injecting further monetary stimulus,” Phil Soper, chief executive officer of both Royal LePage and its parent company, Brookfield Real Estate Services Inc., said in a report Tuesday. “The country’s all-important real estate market simply does not need a rate cut.”
“I worry that stoking this engine further could move us from a perfectly manageable major market expansion into a more difficult correction, as price levels decouple from more household incomes,” he said in the report. Read more
Canada is a bit of a mess, from one of your links last week.
Yes, there are also many messes where IMF policy diktats are less than charitable. Parts of Europe today, Canada tomorrow?
The IMF is controlled by the rich, and governs the poor on their behalf. It’s now doing to Greece what it has done to one poor nation after another, from Argentina to Zambia. Its structural adjustment programmes have forced scores of elected governments to dismantle public spending, destroying health, education and all the means by which the wretched of the earth might improve their lives. Read more
Don't forget Yugoslavia
http://www.balkaninsight.com/en/article/wikileaks-the-imf-s-fault-for-b…
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