American payrolls impress everyone except the markets; trade supporters challenge Trump; Musk makes Aussies an energy offer; UST 10yr yield at 2.58%; oil and gold lower; NZ$1 = 69.2 US¢, TWI-5 = 74.9

FED very bullish now, next hike locked in and talking min two more this year.
I expect our interest rates to follow as bank borrowing becomes more expensive.

Good on NZ for attracting 4000 HNW individuals bringing a massive US 10 mln. That is a huge US$2500 per person, hardly HNW is it?

The new US administration is wrestling with it's actual position on trade. TPP supporters are gaining ground in a battle for influence inside the White House. Some have called the turf tussle a 'civil war' and Breitbart News does not like the way things are developing. All this has to be a positive development for New Zealand.

Is that so?

The latest figures (November 2016) from the OECD suggest global trade will accelerate only slightly in the next few years, rising 3.2% in 2018 to $24.3 trillion. If the Great “Recession” has been an actual recession global trade “would” be in 2018 instead $36.6 trillion. The world economy is thus poised to be only two-thirds of what it was expected to be a full decade after the assumed end of the affair. This was not, of course, a determination that orthodox outlets like the OECD made contemporarily, rather like US economic potential it has been forced upon them by a very different reality. Read more

There is nothing useful in the TPPA, especially if an extreme right wing Whitehouse thinks its a good idea now.

Markets have now factored in a full 25 bps rise in the Fed's benchmark rates due on Thursday.

Hmmmmmm...

Janet Yellen was apparently “hawkish” again in her latest speech, though the reasons why she may have been continue to elude the media and many markets. In many ways, she doesn’t even know, a fact that she expressed several months ago to likewise very little appreciation. The FOMC may or may not raise rates in the next meeting or the next several meetings, but if they do it doesn’t mean anything like how it continues to be described. There truly is no reason for this misleading interpretation, as all the data is readily available to completely dispel it.

The Congressional Budget Office (CBO), for example, produces estimates for economic potential on a semi-annual basis. This doesn’t mean they know what our economy’s potential is or might be, but the figures have other uses. The manner in which they are derived is entirely similar with the models and assumptions used by the Federal Reserve (that does not publish estimates for potential). Economic potential is a key concept in monetary policy, perhaps even the most important part of it. Read more

The problem with the Fed raising the federal funds target band is not that they are doing that instead of another QE or the next genius idea that would follow that failure, but what it says about their view of the shrinking economy – it is for them just the way it is and will be. With no other answers as to why or how, might as well be graying hair and drug addiction as anything more reasonable and inconvenient. Their output gap is closed, and I could not concur in more positive terms. As I wrote earlier for today:

This used to be the Land of Opportunity, but they would have you believe, in polite terms, it was squandered by you and me. Forgive me if I don’t believe that America stopped being America at exactly the moment central bank monetary failure was most exposed for what it always was – a lie. The consequences of it have finally been revealed even to the ideologically blinded. Both the Fed and I agree for once, the output gap is gone and there is nothing left for them to do. In fact, if they would all just resign, then the road to recovery might actually begin, no rehab or retirement facilities required. Read more

Hat tip to another commentator, who mentioned last weeks Economist's housing article. The Economist may not appeal to everyone, nor how it may interpret its housing metrics, yet it barely receives a mention locally, and not in print media The fact that New Zealand, was removed from the Economists charts for a couple of years only reappearing last week at the very top of the pile. Whether we want to be number 1 in the Economists housing metrics , or whether it is an issue is debatable . Personally, I would give it more credibility than another global wealth survey ,suggesting that every rich dude and his dog are coming to New Zealand to prop up real estate.

The Australian energy situation is very interesting and highlights an issue that will become mainstream as nations turn away from conventional generation (excluding Hydro) and to renewable s such as solar and wind. The renewables are not predictable or consistent and this threatens the ability of the power system supply to match demand both long term and instantaneously. The resultant system instability can crash the whole power system. A well set up battery system is one method instantly smoothing the positive and negative mismatches between supply and demand and maintain system stability.
Eion Musks price of $250 per KWhr of storage is very attractive and if prices fall further as predicted, battery storage will become a very real proposition.
https://arstechnica.com/business/2017/03/elon-musk-on-batteries-for-aus…

Sadly however I suspect that there is a very real chance that Eion Musk could could loose out on the guarantee to do it in less than 100 days because getting anything done in Australia is nothing like the USA. In Australia the labour force and bureaucracy will tie him up in knots and delay completion endlessly. 200 days may be nearer the mark unless somebody high up in government rides roughshod of the the typical crap on his behalf.

If HNW's want to come and live here and are Tax Domiciled here , then they are welcome