US consumers confident, China's services deficit grows, China passes new pollution law, but weak; bitcoin value nears record; oil up, gold up; NZ$1 = 68.9 USc, TWI = 75.7

US consumers confident, China's services deficit grows, China passes new pollution law, but weak; bitcoin value nears record; oil up, gold up; NZ$1 = 68.9 USc, TWI = 75.7

Here's a special holiday update of some key events and data you may want to know about today.

Firstly, Americans are more confident in their economy than at any point in nearly 13 years. That's according to two separate surveys. One interesting element of one of them is that consumers expect inflation to retreat from current levels - just at the time professional market analysts expect it to rise from here. Whose view will turn out correct?

One big - very big - beneficiary of this optimism is Amazon. The had their 'best ever' holiday sales season and a retailer that has sales of US$124 bln per year. That is a retail outfit with revenues of 70% of New Zealand's GDP and growing +30% pa.

In China, we hear a lot about their trade surplus - and it is very large, about US$45 bln per month, although it is declining somewhat. But they actually have a trade deficit in services, and it is growing. In November it was a deficit of -US$25 bln, the highest ever.

And staying in China, they have passed "a landmark law" to slap steep taxes on polluters. Levies could put some firms out of business, but despite that this law may not cover the real cost of air, soil and water contamination, analysts say. Mines would have to pay 15 yuan (NZ$3.30) for each tonne of tailings, which often contain heavy metals or other toxic debris that can severely contaminate water and soil. A coal-fired power plant would be subject to the tax of 25 yuan NZ$5.50) for every tonne of ash it produces. But cars, a major source of urban air pollutants, will be exempt from the tax. Nuclear power plants will also not have to pay for producing radioactive waste. And, carbon dioxide, the most important greenhouse gas, is not on the pollutant list.

Wall Street equity prices are not the only financial numbers approaching an all-time high. The price of bitcoin is also approaching its November 2013 peak, a level that at the time was seen as a bubble. Today one bitcoin is 'worth' US$937 (NZ$1,360). Back on November 25, 2013 it reached US$979 (NZ$1,194).

In New York, the UST 10yr yield is up today, now at 2.57%.

The US benchmark oil price is a little higher as well and now just under US$54 a barrel, while the Brent benchmark is just over US$56. American frackers are piling in, bringing back rigs fast. In fact, at this rate they will have more rigs operating that a year ago in about three weeks. International rig counts are rising too.

The gold price is up US$4 to US$1,137/oz.

The New Zealand dollar has slipped over the Christmas break and is now at 68.9 USc. On the cross rates it is stable at 95.8 AU¢, and 65.8 euro cents. The TWI-5 is now at 75.7.

The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here »

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We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I have a friend in Seattle who trades Bitcoin and only bitcoin. He has made some serious coin.
http://finviz.com/forex_charts.ashx?t=BTCUSD&tf=mo

Do any readers use Bitcoin for anything other than speculation? I'm thinking I should have some to stay "with it" but can't think what I would use it for other than making donations to favourite sites.

Dark Web

I hear its' the Chinese driving bitcoin up. What does that mean? They're either pathological speculators or they're beyond desperation in their attempts to get money out of the country. Bitcoin has zero intrinsic value.

One interesting element of one of them is that consumers expect inflation to retreat from current levels - just at the time professional market analysts expect it to rise from here. Whose view will turn out correct?

Hmmmm....

For the 55th consecutive month, the PCE Deflator came in under the 2% inflation target for the Federal Reserve’s inflation mandate. The Bureau of Economic Analysis reported last week that inflation in November 2016 actually decelerated slightly from its meandering pace set more by oil price base effects than $4.5 trillion on the Fed’s balance sheet. Year-over-year the PCE Deflator was up just 1.37%, slightly less than the 1.44% in October, and once more showing that inflation is in no hurry to be restored.

While there is a complete absence of actual reflation in inflation statistics, the idea remains wedded to its non-specific future. “Reflation” proponents, or at least commentary describing the proposition, have argued that it is not about what we see today but rather what will happen tomorrow when things start to go right. There is a fair amount of evidence that the belief is widespread, and thus current statistics won’t matter unless and until they fail to demonstrate a harder basis for the optimism. Read more

interesting comments from an outsider, reflecting what many here are saying about the changes to Auckland

Auckland was their last stop before flying to Hong Kong for New Year's Eve.
"It used to be my favourite city. It always seemed so light, so safe. But I haven't been here for three years and since we've arrived it seems to have changed quite a bit.
"It doesn't seem anywhere as nice or as clean as it used to be
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11773860

? "They didn't know exactly which room the phone was in". I had need to contact a relative a few years back and the police asked for their phone number and within a matter of seconds said they knew where the person was to 'within about a metre'.....

The police don't seem to care too much. I had a laptop stolen from my car at Sky City carpark which is bristling with cameras and I had to go and do my own investigation. Sky City didn't seem to care either actually.

Interesting that the stuff appears to be in an apartment in central Auckland. Personally I would never leave my passports in a car unattended. I always have them by my side in a bag that is also attached to my belt. Always have copies of passports in an email and a hard copy. Have an alternative credit card. The Loaded card from Post Bank is handy to have. You can transfer funds to it using online banking or get a relative to transfer money to it easily.

we have not increased police numbers in relation to populaton for the last 8 years, so you now have less police per population and more crime also,
theft is a very low priorty as the resources are put onto more serious crimes.
i guess next stage of auckland becoming an international city will be guarded enclaves