Bank profits slide and bad loans jump in China; China's economic growth forecast downgraded; More new jobs created in US than expected; UST 10yr yield 1.84%; oil stable, gold up; NZ$1 = 69.1 US¢, TWI-5 = 72.3

Bank profits slide and bad loans jump in China; China's economic growth forecast downgraded; More new jobs created in US than expected; UST 10yr yield 1.84%; oil stable, gold up; NZ$1 = 69.1 US¢, TWI-5 = 72.3

Here's my summary of the key events overnight that affect New Zealand, with news private employers in the US created more jobs than expected in March. The ADP National Employment Report shows 200,000 jobs were added to the private sector over the month - an increase on par with that of the previous four years.

It's interesting to observe the Fed's Chair tread cautiously around interest rate hikes when the job market is expected to remain in such a high gear. All eyes will now be on the US Labour Department's non-farm payrolls report out on Saturday, which includes both public and private-sector employment.

The Asian Development Bank has revised its forecast for China’s economic growth this year down from 6.7% to 6.5%, due to weak external demand and slowing investment. It expects growth to slow even more next year, to 6.3%. It says the impact of the fall will be dampened by higher consumption and ongoing government spending.

Staying in China, two of the country's biggest lenders have reported slides in profit and jumps in bad loans. ICBC (Industrial and Commercial Bank of China) and the Bank of China have seen their net profits rise by less than 1% in 2015, and their bad loan ratios increase by around 30 basis points. ICBC says loans are going sour as the economy slows, structural adjustments deepen and industrial transformation accelerates.

On the flipside, Chinese consumer sentiment increased sharply in March, as people were more optimistic about their personal finances, the housing market and buying conditions. This is according to the Westpac MNI China Consumer Sentiment Indicator, which rose to its highest level since September last year.   

In New York the benchmark UST 10yr yield has eased back to 1.84%.

Local wholesale swap rates will open today at record lows for most terms.

The US crude oil price remains at US$38/barrel, while Brent is at US$39/barrel.

The gold price is up to US$1,228/oz.

The US dollar remains weak following the Fed Chair on Tuesday saying the central bank should be cautious as it looks to raise interest rates this year. The NZ dollar has climbed a half a cent overnight to 69.1 US¢. It's up to 90.2 AU¢, and 61.0 euro cents. The TWI-5 index has risen to 72.3.

The NZ dollar is the highest it's been against the US since June last year and the TWI is approaching its 2016 high set at the beginning of this year.​

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 ».

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

18 Comments

Comment Filter

Highlight new comments in the last hr(s).

Wheeler is going to be pissed with the NZD. Forcing the hand of another cut in April perhaps - doesn't seem anything he does can stop it. Naive to think he can really.

FYI 200k jobs is not high gear, it's stall speed or worse. Which is why the participation rate is crashing. US population is growing at over 2.3 million per year, or double the supposed 'high gear' job creation numbers. Thats the news, Suck it up sheeples, you deserve it.

China’s future challenge for the world economy
http://www.ft.com/intl/cms/s/0/9bae5ce0-f1db-11e5-aff5-19b4e253664a.html

Our dollar is going to be deflationary.

NZD 3 day gain against USD highest percentage gain in more than five years.

"The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade," said one official in Brussels bitterly.
http://www.telegraph.co.uk/business/2016/03/30/britain-sacrifices-steel-...

Doesn't bode well for Glenbrook...

As the Brits are giving us something to think about. ref AJ:

Savers who are investing their money in housing rather than pensions risk being left without enough money to fund their retirement, a top Bank of England official has warned.

The Bank announced a major clampdown on buy-to-let landlords on Tuesday amid concerns that increasingly “risky” lending could lead to another market crash.

Andrew Bailey, a Deputy Governor at the Bank, told the Telegraph that the new rules are necessary to prevent a future housing market crash which could leave millions of people unable to support themselves in retirement.

http://www.telegraph.co.uk/business/2016/03/29/house-price-crash-could-l...

Whose policy will prove correct (more right/less wrong). Or it doesn't matter cause one of them is upside down.

Note: Buy to Let we call Investors.

Synlait are reviewing their milk price to farmers.

'Cash could be the hero when we get to Zero', read that yesterday in an article out of the States, lamenting poor returns and too much risk. Saying, stay in cash, cash will be king.

http://www.stuff.co.nz/business/farming/dairy/78409814/synlaits-420kg-mi...?

My biggest fear is that giving up on producing steel, will negate any advantage the UK and others have if ever China and/or other Nations go to war and we all have nothing in the West to re-arm in a hurry.

The bigger fools in the last World War were caught unawares by Germany and its ploys, luckily escaping us all speaking German and Japanese, by the skin of our teeth.

It took a great while to re-arm, especially as no skills were available, hence Ladies had to often fill the roles in Factories as men were fighting with tat equipment, until the USA and others came to the rescue.

Never forget, plan for the worst, expect the best, surely includes armaments,in this crazy world we live in sucking up to our BFF, until they ain't.

I've only been following this site for a short time. Is the world always been this close to collapsing, or should I calm down?

If you read the articles here and the comments you'd think it was. Lots of doom and gloom, people revel in it.

Winter is coming, collect firewood or a good woolen coat.

Yeah, it's seems like a miracle the human race still exists! I need to find a site that can balance things out a bit.

www.zerohedge.com will lift you up.. :-)

Excellent suggestions. May I also suggest http://www.realestate.co.nz/
as a good pick-me-upper website :-(