90 seconds at 9 am: Aussies to buy F&P Finance

US growth surges +3.9% in Q2; Norway and Taiwan cut rates; F&P Finance to be sold; Sumatra fires; UST 10yr yield 2.17%; oil up, gold down; NZ$1 = 63.8 US¢, TWI-5 = 68.7

28th Sep 15, 7:25am by David Chaston

Here's my summary of the key events over the weekend that affect New Zealand, with news Fisher&Paykel Finance is about to be sold to Australia's FlexiGroup.

But first, the American economy expanded more than previously estimated in the second quarter at an impressive +3.9% pa rate on stronger consumer spending and construction. This bolsters the case for an interest rate rise before the end of the year. But all eyes will be on the September non-farm payrolls report which will be out this coming Saturday. The market is picking another strong +200,000 jobs gain.

And before that we get the Fed's favoured inflation measure, 'personal consumption expenditure' (PCE) which is due out early tomorrow morning. A core rate of +1.2% is expected.

On Friday, Norway’s central bank cut its policy rate by -0.25% to 0.75%. This is the second reduction in four months and came as oil and gas companies had been canceling investments and laying off workers because of lower crude prices.

Taiwan's central bank also announced a cut, this one of -0.125% to 1.75%. That was their first cut in more than six years and observers expect more to follow. Like the rest of Asia, Taiwan is going through a period of weaker exports and lower economic growth as China slows and transitions.

Overnight it has been reported that Fisher&Paykel Finance is likely to be sold to Australia's FlexiGroup. The price is expected to be about $300 mln. In New Zealand, FlexiGroup earlier bought Telecom Rentals from Spark. FlexiGroup itself however is in the middle of serious boardroom turmoil.

Singapore, Indonesia and Malaysia are currently suffering from thick haze and very poor air quality as Sumatran peat fires blaze out of control. Some fires are started by lightning, others by farmers who clear their holdings of the prior year's growth. The effect is the same; choking, thick and unhealthy haze for millions.

In New York, the UST 10yr yield benchmark fell marginally of Friday to 2.17%.

The US benchmark oil price starts the week a little higher at US$45/barrel, Brent is at US$48/barrel.

The gold price starts lower at US$1,148/oz.

However, the New Zealand dollar starts the week higher significantly higher. International investors seemed to be reacting to the combination of the better Fonterra forecast of last week and the signals coming from the dairy futures markets indicating more strong results from the dairy auction next week. The NZD is now at 63.8 US¢, at 90.9 AU¢, and 57 euro cents. The TWI-5 is at 68.7. This is the highest level in almost a month.

If you want to catch up with all the local changes on Friday, 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

by King of the whiners | 28th Sep 15, 11:03am 1443391380

Westpac survey shows collapse in NZ job confidence/pay expectations:
http://www.stuff.co.nz/business/industries/72467086/job-confidence-amon…

Perhaps our importation of record numbers of unskilled workers is having an effect? If you are an employer I suspect you'd be very happy with this outcome - and I suspect if you were the political party that is presiding over this you'd be basking in the adulation of said employers....job done as the saying goes.I wonder at what point the sheep will notice?

by OnwardsUpwards | 28th Sep 15, 11:23am 1443392629

The sheep are stupid. The will NEVER realise how much they are being shafted. Have seen how some sheep cry like babies when they see a famous musician, a member of the royal family, or the pope? Just think how dumb the average citizen is. Do you really expect them to be able to understand that their wages are going down by design? Nah mate, the sheep are there to empty their wallets. Get in line and take some.

by @tony | 28th Sep 15, 1:46pm 1443401200

I take offence in sheep being linked to stupid humans.

Here is something that should be shown in all schools globally to show what the "older generation" is doing to them.
http://www.cowspiracy.com/
(available on Neflix)

Even the "do good" Bill Gates foundation is whining as its huge investment in Brazils Petrochemical industry has been shafted by corruption/greed.

But because MONEY is king; it will never happen and we will all end up dying so someone can add another zero to their bank balance.

"Even if we all stopped ALL hydrocarbon use; we would still push the planet past 2oC and none of the so called environmental groups dare talk about it...

So; back to sheep... at least sheep are unlikely to kill the planet they are living on so they are not be downgraded to stupid humans that are supporting the machine that is killing their own planet.

So; Perhaps the sheep are the smart ones...

You have to wonder are dolphins are the smartest animals on the plant? and I don't see many horses going broke betting on humans.

by @tony | 28th Sep 15, 1:51pm 1443401466

"Cowspiracy: The Sustainability Secret is a groundbreaking feature-length environmental documentary following intrepid filmmaker Kip Andersen as he uncovers the most destructive industry facing the planet today – and investigates why the world’s leading environmental organizations are too afraid to talk about it.

Animal agriculture is the leading cause of deforestation, water consumption and pollution, is responsible for more greenhouse gases than the transportation industry, and is a primary driver of rainforest destruction, species extinction, habitat loss, topsoil erosion, ocean “dead zones,” and virtually every other environmental ill. Yet it goes on, almost entirely unchallenged.

As Andersen approaches leaders in the environmental movement, he increasingly uncovers what appears to be an intentional refusal to discuss the issue of animal agriculture, while industry whistleblowers and watchdogs warn him of the risks to his freedom and even his life if he dares to persist.

As eye-opening as Blackfish and as inspiring as An Inconvenient Truth, this shocking yet humorous documentary reveals the absolutely devastating environmental impact large-scale factory farming has on our planet, and offers a path to global sustainability for a growing population."

Directed by Leonardo DiCaprio

by bender | 28th Sep 15, 3:02pm 1443405768

"Just think how dumb the average citizen is. "
Then realise that one half of the population are dumber than that.

by notaneconomist | 28th Sep 15, 11:29am 1443392977

KOW you are only looking at immigration from an extremely limited point.....and then you shove one up the proverbial rear-end of employers......

I take it you would have preferred NZ to experience significant inflation when we were suffering from a significant shortfall in houses and the rest of the world's economies were struggling with the GFC and the fallout !!!

by Anarkist | 28th Sep 15, 11:45am 1443393959

Where would the inflation have come from notaneconomist? Fuel prices down, exchange rate high, interest rates falling, people's discretionary spending falling because of Auckland property prices, capital flows going offshore due to repatriation of local profits to overseas firms, the trade deficit, and overseas investment by the Superfund etc, Where is the money going to come from for inflation?

by notaneconomist | 28th Sep 15, 3:10pm 1443406233

So you'd have preferred builders charging $200 an hour......and other industry workers jumping ship to get the higher pay and then wages end up moving across the board higher...not rocket science!!

I certainly wouldn't have wanted widespread inflation in NZ when the rest of the world economies were in a hole.

And all those higher wages would have...put house prices up further than what they are now!! And people would still be whining about their discretionary spending!!

by profile | 28th Sep 15, 3:10pm 1443406229

Greens. Saving us from harmless CO2 only to poison us with NOx. Good one.

"None of this excuses Volkswagen for what it did: as far as that goes, however, we might note that most other major manufacturers have produced turbodiesel cars which seem to offer similarly miraculous fuel and NOxnumbers to VW's. Maybe it was only Volkswagen which needed to cheat to achieve them, for some reason.What all this does tell us right now is that the Volkswagen scandal is only the iceberg-tip of the massive pollution problem which has been deliberately willed into being as a result of the impossible crusade to stamp out carbon emissions.We are not only crippling our economies (in Europe), not only pushing our energy bills sky high, not onlysuffering easily preventable droughts: oh no. We're also deliberately, and at some expense, poisoning ourselves slowly to death.

Thanks a lot, hippies."

http://www.theregister.co.uk/

by steven | 28th Sep 15, 4:20pm 1443410431

theregister, a denier web site, bound to be truthful and accurate then, pity their IT reporting used to be good.

by profile | 28th Sep 15, 5:18pm 1443413891

Yes Steven, it's all about the messenger. Don't concern yourself with the collateral damage.

"According to Martin Williams, professor of air quality research at King’s College London, diesel cars account for roughly 5,800 premature deaths a year in the UK alone. Other experts put the figure even higher."

http://www.dailymail.co.uk/columnists/article-3246885/It-s-inconvenient…

"Clean Air in London’s (CAL’s) analysis of the latest data confirms that London had the highest levels of nitrogen dioxide (NO2), a toxic gas, of any capital city in Europe in 2010. Concentrations of dangerous airborne particles (PM10) are much higher in Beijing than London but levels of NO2 are comparable in the two cities.

http://cleanair.london/health/guide-to-health-impacts-invisible-air-pol…

by dtcarter | 29th Sep 15, 12:00am 1443438005

The original investigation that triggered all this, also looked at a BMW X5. The BMW X5 in the real world produced similar results to its benchmarked results. So so far, it does look like only VW were cheating. Though i expect a whole lot more to be revealed as all marques see greater scruitiny, and i see no reason why VW would not have also cheated on their petrol engine emissions tests?