US factories busy; UK confidence drops; IMF's Lagarde to face trial; Australia chooses NZ welfare reform path; UST 10yr yield at 1.57%; oil and gold lower; NZ$1 = 70 US¢, TWI-5 = 74.2

But first, in the US factories are in a strong recovery mode and showed their sharpest improvement in July since November 2015. Their PMI rose to 52.9. Output growth accelerated to an eight-month high, new business volumes expanded at their fastest pace since October 2015, and the survey showed the strongest increase in manufacturing payroll numbers for 12 months.

Our major trading partner chose an alternative interpretation, closely in tune with the US T10yr reflection of abjectly diminished forward growth prospects.

“G-20 countries should intensify consultation and coordination, forge policy consensus, and guide market expectation,” Chinese Finance Minister Lou Jiwei said Saturday at a symposium kicking off the meeting. He repeated comments from President Xi Jinping that it’s “vitally” important for the group to enhance how it works together, adding that the “global economy is at a critical conjuncture” as the “impacts of the international financial crisis are still unfolding.”

On Friday, Premier Li Keqiang said that against the backdrop of rising protectionist pressures and increasing challenges in international trade policy, “it is critical to enhance international economic policy coordination.” He was referring to the recent increase in protectionism between China and the US, leading to a surge in new tariffs and duties against Chinese commodity exports, such as a recent 522% spike in duties for Chinese cold-rolled steel exports, as Beijing seeks to quietly flood the world with its excess production. Read more

Australia's welfare reform is a concern for their population. The free market economy, adopted in NZ under the guise of "Rogernomics", included globalisation and saw many jobs exported. The end result saw many in the population lose job security, being forced onto part time casual labour pools that offer little in the way of benefits and security (National refer to this as "Labour or job flexibility" and spin it into lifestyle choice, although there is little choice in it unless you're already wealthy). Thus the majority of those on welfare have little choice, have given up hope of getting ahead and are being forced to literally beg for what scraps the Government will deign to give them. Getting people off welfare only works if there are secure, sustainable jobs at reasonable pay available, and sorry folks - most of them have been exported to places like China!

This is pretty common through out the world today, and general populations are getting angrier and angrier, thus the disenfranchised are increasingly turning to violence and crime.

Well it's very interesting re the increasing rig count. Even I'm surprised at the pick up from only $50 a barrel. Breakeven must considerably lower than many pundits seem to think. Lower oil for longer.