Here's my summary of the key events overnight that affect New Zealand, with news American households are in a much better financial position.
Overnight the IMF reviewed the state of the American economy. It said their economy was "overall in good shape", with growth set to accelerate from recent setbacks despite an overvalued dollar. But they also noted that too many Americans were living in poverty.
Part of the reason for the IMF's positive view may be that now 79.3% of Americans now have a good credit score. This is the highest level since 2010 when the level was only 74.5%. Before the sub-prime crisis in 2006 it was 76.7%. On average, monthly debt-service payments accounted for 10.1% of households’ disposable personal income, down from a peak of 13.2% at the end of 2007 and the lowest since the US Fed started tracking this data in 1980. This improvement is very significant across the whole country and involves millions of households repairing their financial situation, and significantly. In conjunction with good rises in real wages, the risks to the American banking system have certainly eased.
Also, US "existing-home sales" raced ahead in May to their highest pace in almost a decade, while the uptick in demand this spring amidst lagging supply levels pushed the median sales price to an all-time high of US$239,700 (NZ$335,000).
Locally, Bloomberg is running a story about how much RBNZ Graeme Wheeler has cut back on public speeches, pointing out just how much less engagement and communication he is doing in 2016 than he did in 2014. The pullback seems very pronounced.
Overnight, consultancy Mercer released its 2016 cost-of-living index for 209 international cities. Hong Kong is the most expensive followed by Luanda in Angola and Zurich in Switzerland. Sydney is ranked #42 while Auckland is equal with Canberra at #98. Wellington was ranked #123. This helps put our housing cost debate into some international perspective.
In Europe, the English vote on Brexit is too close to call according to polls just ahead of the start in voting. Campaigning has hit "peak fear". It's an old-fashioned poll where voters need to show up at a polling station. Exit poll indications might be known by this time tomorrow. Voting there is from 7am to 10pm local time, Thursday. So that means voting there ends at 9am NZ time on Friday. The first actual vote data will. come some time after that. Maybe the best way to monitor the likely result is to view our live currency rate charts.
In New York today, the benchmark UST 10yr yield has extended its rises and this morning is up a further +1 bp to 1.70%.
However, the oil price is slipping again. The US benchmark is now just over US$49/barrel and the Brent benchmark is now under US$50/barrel.
Gold is down as well and is currently at US$1,265/oz.
And finally, the NZ dollar starts today a little firmer yet again at 71.6 US¢, at 95.6 AU¢, and at 63.4 euro cents. The TWI-5 index is at 74.6.
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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19 Comments
Keep calm and carry on. I still very much doubt that a Britexit will happen, since so may Brits live across Europe and the rest of the world. The last thing we want to see if the Pound plummeting.
As this could have a direct impact on our companies linked to the UK and especially those companies who have branched out to NZ from the UK.
If the Pound takes a hit in the long term, then they're highly likely to close any offshore service providers here, simply because they'll be too expensive to run with high cost from the NZD on wages and building rental.
So I think most expat Brits will more sensibly vote to remain in the EU, then risk an UK breakup.
Keep calm and carry on. I still very much doubt that a Britexit will happen, since so may Brits live across Europe and the rest of the world. The last thing we want to see if the Pound plummeting.
Why not? I sold pounds for 3.06 NZD in 1998 and would consider moving back to the UK when my son inevitably leaves NZ for greener pastures. Parity would be a suitable return foundation to build upon.
It is a no brainer - when in life does one get to vote for less politicians especially the unelected, unaccountable, overpaid type! Project fear is all you have when the benefits of remaining are so weak. If you have a strong argument there is no need to try and scare people. The elite treating voters like small children.
But they also noted that too many Americans were living in poverty.
Renters Are Making More, And Landlords Get It All
Many tenants are keeping up with rising rents. It's the poor who are hurting.
The cost of financialising shelter?
Wheeler and the rbnz unfortunately know they made themselves look like complete fools due to their seemingly blatant policy of announcing and stating the bloody obvious....then doing nothing themselves to help correct the issues they point at. No one likes procrastinators
I think he's shutting his mouth because in the past everytime he opened it he came across as either deluded, dis ingenious or just plain niave. Stating you have real concerns about this or that and then sitting on your hands waiting for a corrupt government to back you with policy is not a good approach. He needs to get far more aggressive with the bubble and government.
Play it right, act, make the government look like dicks and you a hero
Locally, Bloomberg is running a story about how much RBNZ Graeme Wheeler has cut back on public speeches, pointing out just how much less engagement and communication he is doing in 2016 than he did in 2014. The pullback seems very pronounced.
What's he achieved on behalf of the taxpayers that warrants a slot in the public's busy news schedule? Interest rate repression has hardly made life better for the majority? Why has the RBNZ allowed APRA to hollow out the capital base of the local subsidiaries of Aussie owned banks? Read more
Has anybody wondered why the news coverage of Donald Trump is hysterically negative? Yet, he is enormously popular! Curious eh? The Powers That Be are pooping their pants. Their game is almost up!
Here is Trump's latest speech, in full. What do you think? He really gets stuck in, IMO.
When Donald Trump is elected, the TPP is history. The deaths of our soldiers will not have been in vain. That will be a beautiful thing.
Clinton said yesterday that if Trump got in power he would bankrupt the country;
What......they already owe trillions and most of their politicians are,including herself are morally bankrupt.
She also said the TTPA would be dropped and that she would renegotiate all trade treaties.
I hope she includes NAFTA,the Treaty Slick Willie was a party to,because that really screwed the Yanks.
Under Trump you can expect those factories to relocate back to the States.
He may not be everybodies choice but staying with the status quo and doing nothing is worse.
A slight exaggeration don't you think? If ANYTHING has damaged the US beyond repair, it has not been racist xenophobic people like Trump, but Hillary who is (has been for decades) one of the Wall St headline puppets, thus won't release her speech transcripts, has flip flopped on the TPP, takes money from those who help create the GFC, supports Fracking, on public record saying she would support invading Iran, supported the Bail outs, supported the illegal wars in Afghanistan and Iraq, supported the Patriot Act and continues to support the trampling of their Constitutional Rights , Bill of Rights etc.
IMHO
Trump= incompetent racist idiot but dead obvious to read, thus ...mitigate.
Clinton= total fraudulent charlatan with so many hidden agendas, thus far more dangerous, hence under criminal investigation by the State Dept she ran and FBI.
And Obama has now stepped in to make sure her security emails will not be released publicly or to media until AFTER the November elections, thus he too is again complicit with hiding facts.
Corruption and money in politics is what is f***ing the US. And that is also the fact the world over.
Be not afraid, enough people knowing this is the first step back to better outcomes. Bernie may not get the Super delegate nod, but he has got millions of Americans backing his ideals and will continue too. That to me signals people there want fundamental changes. And they do!... I can tell you, having family there who are desperately struggling to make a living in California, hence my partner is having to send them $400 USD a month so they can get through!
"Overnight, consultancy Mercer released its 2016 cost-of-living index for 209 international cities. ...this helps put our housing cost debate into some international perspective."
Although does this take into local account wages etc Im sure people are earning more in Zurich than Auckland.
Anyone listen to this interview on Nine to Noon yesterday?
Worth a listen.
10:14 AM.Christchurch entrepreneur John Ryder talks about putting his wide-ranging business experience into a guide for New Zealanders called 'Global Investing'. He is a joint founder of Ryman Healthcare retirement villages and the chairman of private equity investment company Direct Capital.
http://www.radionz.co.nz/national/programmes/ninetonoon/audio/201805441…
We all know on this forum that the world economies are very ..very weak as a fact, hence artificial pumping via QE and 'world record' low interest rates across many OECD nations are being used to give the illusion of a still solid functioning system. It's not.
Look at the US FED! Lost all credibility, no one believes their predictions nor threats of interest rate rises
Someone has to man up! One decade on and still everyone playing charades at the expense of millions of peoples futures, hopes and dreams to keep the top 10% wealthy at the expense of the other 90%
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