Here's my summary of the key events over the weekend that affect New Zealand, with news all is not lost for holding the US in to big multilateral trade agreements.
But first, over the weekend markets yawned despite the US non-farm payroll report for February showing a higher than expected gain in employment, a lower than expected unemployment rate, a higher than expected participation rate, and a higher than expected rise in wages. Probably the ADP survey had raised expectations in the final days before the release for markets to be impressed. The US dollar hardly moved with the good data, and the UST 10yr benchmark actually slipped slightly. Markets have now factored in a full 25 bps rise in the Fed's benchmark rates due on Thursday.
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.
Outside pressure is building too. The German Chancellor is off to Washington. She is reported to be preparing to push back against the US President's plan for a 'border adjustment tax'. Not only will it break WTO rules, if the Americans do it, Germany says it will tax US companies the same amount in Germany, and make any tax the American impose on their companies tax-deductible in Germany, compensating for any unilateral US actions. Germany is readying lower corporate tax and 'social contributions' to retain its relative position.
China is claiming its offshore investment has resulted in Chinese firms hiring 1.5 mln people offshore. It is a schoolboy claim; apparently they want us to believe Haier employed all those people at Fisher & Paykel, and all the workers at Silver Fern Farms when it took over or bought into these local firms. China is pretty ham-fisted in its propaganda.
Australia has an urgent energy crisis with no obvious short-term solutions. It is particularly acute in South Australia which set on a 'renewables' strategy it can't deliver. Over the weekend, Tesla billionaire Elon Musk has stepped up with an enticing offer to supply mega battery storage solutions. Australian public policy officials are in thrall, although other suppliers have come through with storage offers too.
Australia may have its issues, but it is wealthy and attracting wealthy migrants. A new report out highlights its position, but it also shows New Zealand features as a prime destination for HNW immigrants, suggesting we attracted 4,000 of these people with US$10 mln in net assets in 2016. That is behind Australia (17,000), the USA (10,000) the UK (8,000) and Dubai (5,500) but still impressive. The main places HNW people are escaping are France, China, Brazil, Turkey and India.
In New York, the UST 10yr yield is unchanged after the US payrolls report and now at 2.58%.
Oil prices were down again over the weekend to just over US$48 for the US benchmark, while the Brent benchmark is just over US$51 a barrel. Something of a rush to sell oil futures is weighing on oil market pricing.
The gold price is also down and is now under US$1,200/oz.
And the New Zealand dollar held at its new lower level on Saturday at 69.2 USc. On the cross rates the Kiwi dollar is at 91.7 AU¢, and against the euro is at 64.9 euro cents. The NZ TWI-5 index at 74.9. And finally, the American securities regulator has turned down an application to list what would have been the first bitcoin ETF in the US.
If you want to catch up with all the changes on Friday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».