Here's my summary of the key events overnight that affect New Zealand, with news of some upbeat data plus the launch of some key transformative technology.
Firstly, in the US, new orders for durable goods rose +4.4% for a second straight month in July. New orders for capital goods were up a remarkable +10.2% in July. Both gains were above market expectations. This rise in demand is a sign that an American business spending downturn was starting to ease. American business investment seems set to rebound strongly in the September quarter.
Adding to the mood, American unemployment claims fell further, also more than expected, although for last week the decline was pretty small. And there are other signs of continuing labour market improvements.
Expectations are that milk prices will keep rising too. The surge in EU milk production, blamed by many commentators for the extent of the world milk price downturn, is over. That's the view of both Fonterra and Rabobank. Adding to the prospects is dry weather and growing conditions in China.
Going the other way, data out overnight indicated a slip in business confidence in Germany, and a drop in factory output in Switzerland..
And for those who have been sceptical about the technology, we should also note that self-driving taxis have been test launched in Singapore. Autonomous cars are almost here and they will shake up transportation in a fundamental way. Public transport is the most threatened. Other companies, including Uber, are about to launch live trials on public roads as well.
In New York, the UST 10yr yield has risen slightly to 1.57% today. And we should probably also note that CDS spreads for sovereign NZ Government debt is about to fall below 20 bps. It is rare company for those countries below that level. The US, Norway and Germany are in that handful. The UK is not, nor Australia, nor Sweden or Denmark.
The US benchmark oil price has also risen marginally. It is now up to just over US$47 a barrel, while the Brent benchmark is just over US$49 a barrel.
The gold price is down a little further to US$1,321/oz.
The New Zealand dollar starts the day still strong, but just slightly lower than this time yesterday. It’s now at 73 US¢, 95.8 AU¢ and 64.7 euro cents. The TWI-5 index is at 75.9.
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
23 Comments
Uber is already priced in NZ so low that it challenges bus and rail fares. Without a driver it could be even closer (or cheaper). Took Uber from airport last night in Auckland in rain-induced traffic chaos. The app got us through the gridlock at about the same price as Skybus.
But the big benefit is time. Ridesahring is point-to-point, on demand. Public transport is only for those with time to waste, and in the future it migjht not even be cheaper. PT is facing big issues.
Finally, a substantial fleet of automomous taxis will allow convoying, which is far better use of roads. It will also certainly be far cheaper than owning your own car for any point-to-point travel.
You got an uber cbd to aitport for less than $18?
And how does replacing thr driver with a robot solve congestion? The cars still take up the same roadspaces. Auckland drivers already platoon. And taxis have to make return counter peak trips to pick up the next fare adding to congestion. Theres pleanty of research on this stuff.
Ah well if you happy to pay more than 18 i find it cheaper and far more convenient to drive and park in front of the terminal. 50 dollars or so (varies with demand) is cheaper than two illegal uber fares.
For long stay > 1 week however taxi does work out the better option. Due to either cost or inconvenience of shuttle to cheaper long stay
Still irrelevant for getting to work though, bus is much faster than sitting in a taxi in traffic.
Humans aren't very good at driving in convoy, they tend to speed up and slow down too much. Plenty of queues on motorways are caused by traffic waves where someone has optimistically sped up and their subsequent braking flows back and amplifies. Part of the idea of the new Wellington Smart Motorway is to deal with this problem
http://www.nzta.govt.nz/projects/wellington-northern-corridor/smart-mot…
Driverless cars should be able to drive closer together safely (faster reactions if not actually communicating with each other) and keep a smooth speed better. Not to mention the huge numbers of lives that will be saved by this technology, the sooner we get human drivers off the roads the better.
Going to get much cheaper when TESLA and Elon Musk implement ride sharing. No need to even own a car anymore. Why have a car that is used only 3% of the time.
Or even better, own a car, drive it to work, then send it out while you're working to make you some money.
These are think big ideas, and will make everyone better off. Much better and forward thinking than John Key's sell everything to foreigners idea.
Large investment in public transport at this point seems unwise as driverless cars is going to have a huge impact on how people get around. At the moment, both my partner and I drive to work. We leave at similar times and go to similar places. We drop 2 kids off on the way. If we had a driverless car, we could go together and the car could go off and do other trips during the day. When she goes home, the car could pick her up and then I could either order another one to come and pick me up or our car could. This would mean we only need to own one car. It could also enable us to car pool and drop someone else off in the mornings. This will cut down on the number of cars on the road and enable more ride sharing. It won't replace public transport but it will change it. Public transport will be best for major routes like the northern bus way and people could get to them via ride sharing driverless cars. It will be much quicker than buses driving around in suburbs on predefined routes.
I am hearing similar stories, Uber at this point in time is an awesome tool. While hitching recently I got picked up by an Uber driver that had done a long distance run for an airport customer. It has made an intercity taxi run also competitive with public transport.
The Indian driver initially asked if I would pay for the ride, which was his return run. I laughed and said that isn't in the spirit of hitchhiking mate. Hopefully my company made for an even trade :-)
What will automation do for all the recent immigrants that can't find any other work?
Autonomous vehicles could actually make traffic times worse if everyone leaves buses and goes into cars (even with the convoying). Once it's not unpleasant to be in a car in traffic, people will take more trips and worry less about rush hour. Not sure the solution - except perhaps make convoying as efficient as possible, which probably means dedicated lanes on the motorway and elsewhere while there's a mix of cars. Could also have autonomous buses in the same lane so public transport remains efficient. Certainly the Auckland planners are stuck in the dark ages with their discussion of trams - trams, hello? autonomous transport is only a few years away.
Uber is cheaper than a taxi but not close to standard public transport. I can get the bus to work and back for a week for $30.50 (new bus fares in Auckland) I am not going to get to work and back for a single day for $30.50 via an uber. If you take the driver out of it, it might beat self driving with petrol and parking. At that point it becomes viable to not own a car and use a combination of uber and public transport. If you combine ride sharing with uber you could potentially compete with public transport.
It wil crash less..its already better than the average driver.
Traffic? ... An estimated 30% of traffic in central cities are driving around looking for carparks; driverless cars don't park, but go from one pick-up to the next; uber share will also be in the mix (ie full cars); driverless cars will be the size of a pod.
Have a listen to some of the tech valley podcasts....Once you get a grip on whats coming, you will start to question the Auck trasnport plan which appears focused on current tech, not whats about to hit us. And remember...many at first thought Henry Ford (and Bill Gates) were nuts...
Rastus - what these well meaning predictions conveniently overlook is energy. Where is the energy coming from to drive this amazing future? And remember , its not just a case of batteries for cars, its Trucks and roads and infrastructure and ...
Seriously, look into energy, because once you have a grip on whats coming ... you'll wish you hadnt.
As an aside, Uber is losing huge money, and Tesla and Musk live off subsidy handouts. It just doesnt stack up.
yes I do understand the enery problem, however was limiting comment to current mindsets verse what drivelerless might offer. A lightweight small pod - verse 2 tonnes of 4 wheel drive people mover (which i believe was a top seller this year). One 2 tonne of vehicle per person verse multiple users of small electric pod. Surely some energy gains? Enough..who knows? The whole carbon levels, ice melt, energy use issue is a pretty depressing one at times. chin up.
Some good positive trends there David, jobs, growth, production etc.
How come we have interest rate settings at global depression/armageddon settings, negative even and talk of helicopter money. Don't those central Bankers read Interest.co?
You need to get yourself along to that Jackson Hole and tell them what's really going on.
Good points with some exceptions which I will address lower down.
But first:
Following June's disappointing relapse in Durable Goods Orders (which was revised lower), July's preliminary headline rose 4.4% (ahead of 3.4% exp) - the biggest MoM gain since Oct 2015. However, due to the revisions durable goods orders fell 6.4% year-over-year - the second big annual drop in a row.
... but we note that Capital Goods Shipments non-defense Ex-Aircraft fell 0.4% MoM... which led to a 9.5% collapse in year-over-year core capex unadjusted orders. Read more
Seasonal adjustments in election years are always subject to revision.
Reaching for yield or avoiding it in some cases is a high risk game put upon us by inferior central bank operational skills.
The public criticisms are to the point. Read two here and here
There is monetary dislocation in the global short term funding function. Deutsche Bank keeps reminding us - Deutsche Bank CEO Warns Of "Fatal Consequences" For Savers
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.