US growth rises, jobless claims low; IMF wants haircut; TPP talks get hard; Aussie banking regulators warn; UST 10yr yield 2.27%; gold lower; NZ$1 = 65.9 US¢, TWI-5 = 71

Here's my summary of the key events overnight that affect New Zealand, with news the TPP negotiations are at the really difficult stage.

But first, in the US, economic growth accelerated in the second quarter to +2.3% as strong consumer spending offset the drag from weak business spending on equipment. Although the result was below analyst expectations, the American economy has some clear and steady momentum that will bolster the Federal Reserve's goal of hiking their policy interest rates soon.

The latest American unemployment benefit claims data for last week has showed a small rise, but this data is still near its cycle lows and won't worry the Fed.

In Europe, an IMF official said the IMF wouldn't fund Greece without debt-relief pledge from other creditors. First is was Athens vs Germany, now it looks like it will be the IMF vs Germany.

In Hawaii negotiators are becoming less confident that they can get a final deal by Friday's deadline because of differences over market access for agriculture. In almost every trade deal ever negotiated, freer access for farm products is almost always the final sticking point.

In Europe, they can't wean themselves off parochial support measures either. They have just confirmed they will continue subsidies for exporters of dairy produce, fruit and vegetables into next year to ease the impact of a Russian ban on those goods.

In Sydney, the chairman of Aussie banking regulator APRA has made an insightful observation: the real disruption in the banking sector doesn't come from technology per se but from lower brand loyalty. Younger customers are increasingly willing to put their trust in the latest digital offerings, and when all institutions offer good service, brand doesn't matter. Convenience does.

And another Aussie regulator signaled it would be issuing a critical review of bank lending practices into the 'investor' sector.

And staying in Australia, building consent levels have suffered their largest fall in nearly a year as the huge surge in high density apartment building eased in June.

In New York, the UST 10yr yield benchmark is basically unchanged at 2.27%.

The US oil price is just below US$49/barrel, and Brent crude is at US$53/barrel, basically unchanged over the past couple of days. The sustained low price is fueling a construction boom in the US.

The gold price is a bit weaker today at only US$1,088/oz.

The New Zealand dollar is lower today as the greenback gets a boost from their GDP data. The Kiwi dollar is back at 65.9 US¢, at 90.5 AU¢, and at 60.4 euro cents. The TWI-5 is at 71.

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

Law professor skewers Key mouthpiece Hosking on TPPA:

http://mananews.co.nz/wp/?p=7005

you would have just as much luck discussing with a panda

Professor speaks with intelligence.....
Mike Hosking ... rather than an enquiring mind..... seems to be "dumbing it down".... as if its all a "walk in the park" and anyone who questions things is paranoid..??/
Either that or he is trying to polarize.... or... he is simply dogmatic..??

Transparency is everything....
I don't know why this TPPA is so secretive..???

if you heard the stuff in it you would know why its a secret.
it needs to stay that way so laws are in place when the riots would start.

NWO !

No laws will keep the guilty(traitors) safe. When riots get real as in 'French Revolution' real then all options are on the table. The only difference in today's age is that there are a lot more lampposts around to swing from. That's a good thing because there seems to be a lot of shills and bought off scumbags these days. Plenty of people are upset about his TPPA garbage forced on them.

Malaysia may save us from taking drastic action after all:
http://english.astroawani.com/business-news/malaysia-will-not-sign-tppa-...
Unlike JK and 11% Grosser, he states:
"As the minister in charge of the TPPA talks, it is my responsibility to ensure that our constitution, sovereignty and core policies of the nation, including the interests of the Bumiputera community, are safeguarded and upheld."
He said ultimately, the final document, together with the two cost-and-benefit analyses will be presented to the public and Parliament. The decision whether to sign or reject TPPA will be a collective Malaysian decision, he said.

Wouldn't it be wonderful if our team made the same statements? Of course we have no written Constitution, so no worries there for "the team." And somehow Parliament and the public have no say here (how did that happen)?

French revolution wasn't sheeple vs united legalised automatic weaponry. In the French revolution there were a large number of politicial and business people supporting the revolution.

The ever erudite Jeremy Grantham explains why thinks aren't what they used to be (and won't be in the future). From page 8 onwards.....
https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-...

The latest American unemployment benefit claims data for last week has showed a small rise, but this data is still near its cycle lows and won't worry the Fed.

Hmmmm.
Nonetheless, increasing employment has yet to significantly boost household earnings. After-tax income adjusted for inflation rose at a 1.5 percent annual rate in the first quarter, the smallest gain since the end of 2013, the Commerce Department’s report showed. That meant consumers had to dip into their bank accounts to boost spending, sending the saving rate down to 4.8 percent from 5.2 percent in the first quarter.

Business spending remained a sore spot, with investment excluding housing falling at a 0.6 percent rate, the worst performance since the third quarter of 2012.

Government outlays were another source of weakness, rising just 0.8 percent after dropping 0.1 percent in the first quarter. A 2 percent gain among state local agencies was almost wiped out by a 1.1 percent drop at the federal level. Read More

Re US growth of 2.3%
I said a couple of days ago that i expected growth of 2.4% for 2015 and as Q1 was -0.2% that meant we needed an average of 0.8% for Q2,Q3 and Q4 (+0.2 of course).
So i speculated that as the first figure to come out is always higher Q2 would come out at 1.5% (annual 4.5) but that would look too high so probably be 1% (2015 annual 3%)
Blow me down it came out as an annual of 2.3% and this, i am sure, will be revised down later.
Based on this figure (2.3%) this looks real bad for the US economy.
When it is revised down later, as i am sure it will. We will see an Q2 growth rate of (my guess) of 0.3% and my guess is we will have, a final end of year GDP growth of, at best 1%

Be a sport.

See the AFR JK and Bill giving to the Ozzies (harden up) as they have a confidence problem - John suggests

Then on TPP saying... I've seen ...... nothing is so worrying that we should walk away..

Thats all folks

Read it here - it's a laugh a minute - why did Bill demand the RBNZ activate the interest rate stabilisers if it's just a confidence issue?