Rate cuts still on ECB's cards; PBoC red flags high corporate debt levels; US consumer sentiment slumps; Fonterra expected to report strong result; UST 10yr yield 1.88%; oil tracks up, gold down; NZ$1 = 67.9 US¢, TWI-5 = 71.2

Tick tock. The time bomb gets closer to exploding.

http://bloom.bg/1nZwZUN

What's with the run up in oil prices?

Perhaps a precursor to a weaker USD.

Only one in nine invoices from small businesses being paid on time says Xero
http://www.stuff.co.nz/business/industries/78026874/only-one-in-nine-in…?

Interesting that the ECB chief economist differs from the ECB president. I came across this short piece that suggests a sort of deal was done behind the scenes at the last G20 meeting:

Thus, a short-term rapprochement may have been quietly agreed to at the recent G20 meeting in Shanghai. Quoting David:

What Mario did yesterday was to engineer a credit easing without a currency devaluation. And my suspicion is that this was all part of a gentlemen's agreement back at the G20 meeting. Here was what I think happened in Shanghai. The BoJ and ECB proclaimed that they were both going to ease aggressively in March. The PBOC then said, well if you drive the EUR to parity and JPY to 130 with deeper negative rates, we will break the USD peg. And that’s when everyone said, ooohhh not so fast. It was surely well understood by all participants that the August and January CNY moves had destroyed all the hard reflationary work the ECB and BoJ had done since Q4 2014. And a full break in the CNY peg would bring a further nasty and unwieldy tightening in global financial conditions (i.e. our 1998 argument). No one wanted that! Also, it was no doubt widely understood by all those involved that the Chinese (with the peg in place) could not take a significant strengthening in the DXY given their domestic debt and growth situation. [More on the significance of that below – JM.]

So the players in this very complex currency war game all sat down and came up with a simple agreement. The ECB and BoJ would focus purely on the DOMESTIC credit-easing channel. They would not use these highly powerful negative rates (and forward guidance) to lower risk-free real rates, and in turn weaken their currencies. Further, the Fed likely gave assurances that it would not rates, and in turn weaken their currencies. Further, the Fed likely gave assurances that it would not remove accommodation too quickly via rate rises. That would also keep the DXY in check and give the Chinese time to use fiscal policy and structural reforms to manage the unwind of their debt bubble. All that said, I can imagine the Fed is thinking long and hard about ways to focus less on rate rises and more on a domestic credit tightening if conditions warrant further accommodation removal. The exchange-rate externalities which arise from using rates may simply be too problematic given the delicate bilateral “détente” structure between the PBOC and FOMC. That is certainly some food for further thought.

Of course Fonterra will be posting a near record profit ............ because they are paying farmers so little for the milk .

Fonterra's profit has an inverse relationship to the milk price , higher prices of milk solids paid to farmers , equal higher input costs , hence lower profit

Almost ALL of their input costs have fallen in price, milk has halved , diesel costs for their massive fleet of trucks has almost halved , borrowing costs are down , headcount is down and due for more cuts , so the wage bill is down .

On cannot help but notice that ordinary Kiwis are getting none of the upside of this at all , as the retail price of milk remains stubbornly FIXED .

It almost criminal that one organisation has near- monopoly power on the retail price of a commodity , and in many civilised first world - countries its illegal to rig prices in such a manner

....... Fonterra has also hinted it may unveil support measures for farmers when the result is announced.
hinted it may.....? when the result is announced..? Translation = Sod all if we can make it look less brilliant.
I'm guessing a sheep is going to do the announcing just to gauge how much more sheepish the announcement made it feel.

http://www.marketwatch.com/story/the-government-just-garnished-176-mill…

I wonder which one it was....

Garnish
ˈɡɑːnɪʃ/
verb
verb: garnish; 3rd person present: garnishes; past tense: garnished; past participle: garnished; gerund or present participle: garnishing

1.
decorate or embellish (something, especially food).
"garnish each serving with a dollop of sour cream"
synonyms: decorate, adorn, trim, dress, ornament, embellish, enhance, grace, beautify, prettify, brighten up, set off, add the finishing touch to; informal jazz up
"garnish the dish with chopped parsley"
2.
Law
serve notice on (a third party) for the purpose of legally seizing money belonging to a debtor or defendant.