90 seconds at 9 am: Don't rush to raise: Brainard

Brainard holds to dovish stance; Jamie Dimon says get on with it; PBoC worried about housing bubble; NAB in 'world first'; UST 10yr yield at 1.69%; oil up, gold down; NZ$1 = 73.5 US¢, TWI-5 = 76.7

13th Sep 16, 7:20am by David Chaston

Here's my summary of the key events ovenight that affect New Zealand, with news there are calls for the US Fed to "just get on with" a rate hike.

However, Wall Street equities have clawed back about half of yesterday's losses after Federal Reserve Board Governor Lael Brainard stuck to her dovish stance on interest rates, saying the central bank must be cautious in removing monetary stimulus too quickly. Equity markets might have been relieved because they thought they were going to hear a change of tune from Brainard. But bond markets have continued their sell-off with yields climbing further this morning. The "turning point" narrative is taking hold among bond investors. In fact "yield stocks" are also coming under pressure. Not every Fed voter agrees with Brainard (and Yellen?), so next week's meeting will involve "serious discussion".

The JPMorgan Chase boss, Jamie Dimon, said overnight that the US economy can handle a rate rise. And he just wants the Fed to get on with it "sooner rather than later".

In China, there are signs their central bank is becoming increasingly worried about their housing bubble. According to a key economist at the bank, China should take steps to restrain bubble-like expansion in housing markets and tame excessive financial inflows into property.

In Australia, NAB is offering a "world first" credit card - without the card. The account will exist solely on a smartphone and use contactless technology.

And staying in Australia, citing "very favourable" growing conditions, they have lifted their forecasts for domestic barley, canola and wheat crops – setting the scene for what one analyst termed a "gruesome" export battle.

In New York the UST 10yr yield is higher again today and now at 1.69%.

The oil price has firmed in today's trading, with the US benchmark price now just over US$46 a barrel, while the Brent benchmark just over US$48 a barrel. OPEC has raised its forecast of crude supply for 2017 as supply from fracking and other rivals just keeps on growing. The US keeps adding new rigs into production.

The gold price is lower however, by about US$10, now just on US$1,320/oz.

The New Zealand dollar opens just a little higher than this time yesterday. It is now at 73.5 US¢, 97.2 AU¢ and 65.4 euro cents. The TWI index is now at 76.7.

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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26 Comments

by InfoWars | 13th Sep 16, 7:42am 1473709357

Meanwhile National are at record highs. Seems like the people complaining about rising house prices and rents are the loud minority.

Everyone else is enjoying the party I guess.

by the Joneses | 13th Sep 16, 9:15am 1473714901

National used to sit at 50-55% in Pundit's poll of polls, now they sit at 45-50%, I fail to see the record highs you are talking about.

by Groen_mamba | 13th Sep 16, 9:19am 1473715165

The 5% variance are all registered on this website

by David Chaston | 13th Sep 16, 9:39am 1473716393

I don't think National ever "used to sit at 50-55%". It has been rare they have been over 50%.

We have a chart of political polling since the last election here. It tracks a "poll-of-polls". You can also see the chart on all our Opinion pages.

by the Joneses | 13th Sep 16, 11:03am 1473721400

From 2009 till 2011 they were comfortably in 50-55% range according to Pundit's poll of polls, topping out at maybe 56% late 2009. Link here.

by Noncents | 13th Sep 16, 9:38am 1473716285

or they are still equally as disenfranchised with the opposition.

Only thing that really makes sense is the whole "better the devil you know" argument.

by Boatman | 13th Sep 16, 10:04am 1473717840

@infowars , Nah mate the Poll is wrong, flawed due to outdated polling methodology and a change in technology, and a move away from cable telephones

The Pollsters use the Phone book so they call households with traditional telephones that we had in our houses in the 1950's 60's and 70's , which is archaic methodology in our modern times

I , for example, have a landline , but I am not listed in the phone -book, so I have never had a call from a polling Company.

The people who respond to these polls are called by Landline Phones , and most low income families who are living in cars and garages don't have landlines , and anyone under 25 does not know what a landline is .

The Polls don't reflect the views of young or low -income Kiwis who have been pushed aside by migrants taking up or renting houses in low income areas .

by Don m | 13th Sep 16, 10:32am 1473719533

I disagree boatman.
The polls are probably accurate.
I too am in the phone book and have never been polled so your point is moot.
As for "low income families living in cars garages not having landlines and not being polled .."
I think this fact strengthens the poll results as those people you mentioned don't tend to vote anyway..most cant be bothered.(ditto for many of the under 25,s)
its noticeable how labours fortunes have steadily declined since they hitched their wagon to the greens.
Little is a dead man walking..whether he believes the polls or not.

by sharetrader | 13th Sep 16, 7:59am 1473710366

deja vu one year later same hmmm and haaaa from the FED

by Didge | 13th Sep 16, 8:03am 1473710612

American defence think tank predicts possible Australian property crash in six weeks.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…

by InfoWars | 13th Sep 16, 8:35am 1473712548

Nothing can be predicted with accuracy like that.

by Gummy Bear Hero | 13th Sep 16, 10:03am 1473717799

... psssst ! .... wanna buy some Credit Default Swaps on the Oz residential housing market ?

Deutsche Bank have given me an open contract note , I can photocopy as many $ billions as you want ...

... tell no one else !

by rp | 13th Sep 16, 11:03am 1473721415

Foreign buyer tax introduced in Melbourne like Vancouver....watch this space

http://www.sro.vic.gov.au/foreignpurchaser

by Neven911 | 13th Sep 16, 3:22pm 1473736961

Actually i'd like to know who in JK's office had a whisper in the shell like of the editor of the Herald to get this piece of propaganda published, not that i'm paranoid or anything

by Stephen Hulme | 13th Sep 16, 8:32am 1473712375

Equity markets might have been relieved because they thought they were going to hear a change of tune from Brainard. But bond markets have continued their sell-off with yields climbing further this morning.

Not surprising:

The Treasury Department sold $24 billion of three-year notes and $20 billion of 10-year debt at 1 p.m. New York time. While the government has issued obligations of differing maturities on the same day, the simultaneous closings are unique for coupon note sales, said Aaron Kohli at BMO Capital Markets Corp. Read more and more

Back to "none and done"?

by Gummy Bear Hero | 13th Sep 16, 9:27am 1473715666

Interesting move by the NAB ( BNZ parent ! ) in Australia , the " Claytons Credit Card " ...it's one of those stories that flies below the radar , but which is a potential game changer on a worldwide scale ...

... further entrenching the " cashless society " ...

Awesome , absolutely awesome with a capital " O " ...

by dtcarter | 14th Sep 16, 10:50am 1473807010

What on earth is 'game changing' about using the NFC chip embedded in your phone rather than a chip embedded in a plastic card? Rather trival change to have 1 less card in your wallet.

by Roger Witherspoon | 13th Sep 16, 9:30am 1473715832

I can't believe the rubbish that passes as journalism about the US Federal Reserve. The group that actually get to vote are mainly appointed and are they really going to put up interest rates a few weeks out from the presidential election? They will cover their backsides and do what is expected of them, like the obedient little civil servants they are. That's why they are there. They are appointed for their malleability. They are not going to do anything that might jeapardise Hillary's chances, to them the idea of a Trump presidency is the end of the world.

by Stephen Hulme | 13th Sep 16, 10:02am 1473717768

Mr. Warsh, a former member of the Federal Reserve board, had this to say:

The conduct of monetary policy in recent years has been deeply flawed. U.S. economic growth lags prior recoveries, falling short of forecasts and deteriorating in the most recent quarters. Read more

by Boatman | 13th Sep 16, 9:49am 1473716951

So the PBOC or worried , well about bloody time.

We all need to recognise there are housing price bubbles almost everywhere except in Syria , Iraq and Afghanistan , driven by cheap money .

Our bubble is made worse by unplanned immigration , where we have been left gobsmacked by the numbers of new arrivals , all of whom need somewhere to live , and where we have done no planning to house these newbies whatsoever .

Its a disgrace that Government has been so tardy in its planning

by Gummy Bear Hero | 13th Sep 16, 9:56am 1473717411

If anyone was in any doubt about how incredibly precious our water is , might I suggest a trip over to Nasa's " Astronomy Picture of the Day " site ...

... yesterday they depicted an image of all the planet's water , accumulated as if it was a sphere , sitting against the side of our good Earth ...

http://apod.nasa.gov/apod/ap160911.html

Completely blew me away !

by David Chaston | 13th Sep 16, 10:13am 1473718411

wow

by PocketAces | 13th Sep 16, 10:18am 1473718722

Bloody hell, at first I thought that bubble just represented fresh water but it looks like it is ALL water. Surely not, but amazing as it is, it looks it is all. Sobering indeed

by profile | 13th Sep 16, 12:00pm 1473724816

And that water is still throwing up surprises: "From the air, it looks like a 2,300-square-mile field of submerged doughnuts on the ocean floor.

The limestone circles amount to a second, deeper reef behind the Great Barrier Reef, researchers say. The scientists who discovered it off the coast of northern Australia say they're surprised by its vast size — and by the strange shapes."

http://www.npr.org/sections/thetwo-way/2016/09/02/492383489/massive-don…

by Mike B | 13th Sep 16, 1:07pm 1473728822

Grossly misleading.

This is not a comparison of the surface where land verses water

You cannot take the earths surface water roll it into a ball and expect it to be as big as the earth it came from. Thats stupid.

If you take all of the earths VISIBLE land, roll it into a ball and see how big it is compared to the earth Yes WOW
Similar size as the water ball i bet.

by profile | 13th Sep 16, 11:13am 1473721984

"Hedge funds and other large speculators expanded their net-short holdings in wheat to 132,577 futures and options in the week ended Sept. 6, according to U.S. Commodity Futures Trading Commission data released three days later. That’s the most since the data begins in 2006. The bets have been net-short since August 2015, the longest streak ever.

It’s not just the wheat market that’s stuck in the doldrums. Corn and soybean prices both fell in August after the USDA predicted that domestic farmers would harvest record crops. With bumper harvests on the way, there are signs that farmers and elevators won’t have enough space to store all that grain. "

http://www.bloomberg.com/news/articles/2016-09-08/farmers-face-storage-…