Here's my summary of the key events overnight that affect New Zealand, with news that Aussie wage growth, and therefore purchasing power, is slowing.
But first, the US Fed has sent an unusually frank message to Wall Street, delivered in the official minutes of their April meeting which are out today. They minuted that if growth, the labour market, and inflation all pointed in a positive direction, it "would be appropriate for the Committee to increase the target range for the federal funds rate in June". (Page 10.) And the recent data seems to suggest they will pull the trigger on a +0.25% rise on June 16. Benchmark rates rose on Wall Street. Equities switched from being up to being lower on the day.
Perhaps surprising many, Japan's economy has dodged a recession after it grew faster than expected in the first three months of the year. Their GDP grew at an annualised pace of +1.7%. Markets were expecting +0.3% and in Q4 2015 growth was a negative -1.7%. The better-than-expected growth rate came after higher government spending helped to offset weakness in business investment and exports.
Aussie wage growth in the March quarter came in quite low, at +2.1% pa. This is its lowest rate since this data series started in September 1998. Not only was it low, but rises in the private sector were even lower. Still, real wages are still rising because their inflation is even lower at only +1.3% pa. All eyes today will be on their unemployment data.
In New York the benchmark UST 10yr yield jumped today to 1.82% on the release of the Fed minutes. This will no doubt flow into local wholesale rates today, rates that have been getting flatter here recently.
The oil price is basically unchanged with the US benchmark now just over $48/barrel and the Brent benchmark just under US$49/barrel.
The gold price fell by a bit more than US$10 and is now at US$1,266/oz.
And finally today, the NZ dollar is also little changed and will start at 68 US¢, at 93.1 AU¢, and at 60.2 euro cents. The TWI-5 index is now 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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11 Comments
yes could not agree more, was able to sell a third of my holdings last year to buy my house cash, only took ten years to get there, best period was 2009, i could not believe my luck and put everything i had into good NZ companies that had been sold down to next to nothing in the panic.
and the smile is because is bigger because never had debt and did not have to deal with pesky tenants (been there)
Too much cheese....
http://www.telegraph.co.uk/news/2016/05/18/america-is-facing-an-overwhe…
My favourite (private) Chinese company Shanghai Pengxin , that passed good character assessments with the OIO. May 14 The Shenzhen Stock Exchange , has a high level of concern about the excessive turnover in the board and management team of Hunan Dakang (controlled by Shanghai Pengxin),following the recent resignations of its CFO and Chairman, the second in six months .The exchange notes that the company needs to take concrete measures to maintain stable operations. It has now changed its name to Hunan Dakang International Farming and agricultural Company having purchased a stake in a distressed Brazilian company. ,Hunan having been recently investigated for the misuse of raised funds Shanghai Pengxins listed resource company Pengxin Mining is currently being investigated by the Securities regulator for not meeting its disclosure requirements amongst other issues. This pattern of behaviour is endemic thru all of Shanghai Pengxins branches, yet for some reason the OIO reasons that Shanghai Pengxin meets the good character requirements. The one common denominator that features in Shanghai Pengxin is the resignation of multiple Chief Financial officers ,regulatory investigations of its chairmen .We allowed this company to place its tentacles into New Zealand , thankfully Australia seems to have caught on to its history in blocking the Kidman deal.
imported pests. This may be a case for Bernard to jump in the car again.
http://www.radionz.co.nz/audio/player/201801282
North Island farmers claim chicken manure is helping to spread one of the world's worst cropping weeds, but the Ministry of Primary Industries won't do anything about it.As of last Friday the aggressive weed, velevetleaf, which damages crops by competing with them for nutrients and water, has been found on 248 properties throughout 11 regions of New Zealand.
The culprit in the South Island has been identified as fodder beet seed, sourced from Italy and certified by Danish authorities and imported and planted last year.
In the north Island MPI says the source is not new, rather the result of an old incursion back in 2011. Farmers in Bay of Plenty and Waikato, disagree.
Hew Dalrymple is the Maize Vice Chairman from the Federated Farmers. Colin MacKinnon is the Bay Of Plenty Chairman of the Arable section. Trevor James from AG Research in Hamilton is in charge of the identification of weed seed.
http://www.radionz.co.nz/national/programmes/ninetonoon/audio/201801282…
knock, knock,
who is there?
MPI where!
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