Here's my summary of what's made headlines overnight, with news one of the deadliest suicide bombers to strike in recent years has caused devastation in Kabul. The bomb, set off at rush hour, killed at least 90 people and wounded 400. It also damaged a number of embassies in what was meant to be a secure part of the Afghani capital.
In other news, Chinese authorities are publicising how hard they’re cracking down on those who sneak money out of the country. The State Administration of Foreign Exchange has identified five of the worst offending companies, which forged contracts or invoices to remit US$226 million offshore in the last two years.
It has also named and shamed five individuals, one of which used the US$50,000 annual foreign exchange purchase quotas of 84 people to remit US$4.35 million to his own accounts in Australia and Hong Kong over a year. It fined this person a million yuan.
Over to Australia, authorities are trying to get on top of the A$40 billion black economy. The taskforce set up to advise the government on the problem is focusing on fraudulent invoicing, the country’s huge stash of $100 notes, the sharing economy and sham contracting.
New data shows inflation in Europe was lower than expected in May, at 1.4%, with core inflation at 0.9%. The European unemployment rate dipped to 9.3% in April - the lowest rate recorded in the euro area since March 2009.
US President Donald Trump is expected to follow through with his election promise and pull out of the Paris climate agreement. While his denial of climate change has attracted the support of some, it's seen Trump clash heads with the likes of US Secretary of State Rex Tillerson. The move won't dissolve the 195-nation pact, but will create yet another barrier between the US and the rest of the world.
In New York, the UST 10yr yield remains at 2.21%.
The price of oil has dropped nearly US$2 overnight. The US crude benchmark is at US$48 a barrel, while the Brent benchmark is at US$50.
The gold price has increased to US$1,271/oz.
The New Zealand dollar remains strong at 71 USc. As ANZ puts it, it’s “up, up and away” at 95.4 AU¢. The data flow on activity and commodity prices continues to flatter us on this side of the ditch. The dollar is at 63.1 euro cents. The TWI-5 index is at 75.2.
All eyes will be on New Zealand’s terms of trade this morning, which could hit a multi-decade high.
If you want to catch up with all the 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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31 Comments
Accurate little piece from the local paper... a good summary.
The Long March To Corporatocracy
https://www.michaelwest.com.au/australias-march-to-corporatocracy/
Such is the pervasive influence of corporations and consultants over government and the de-skilling of the public service (as evinced by the recent slew of IT debacles) that Australia appears headed down the road to full-blown corporatocracy.
If they rely further on external parties for expertise and policy advice, governments – both state and federal – are likely to be emasculated, entirely laid at the whim of private vested interests.
With no expertise, let alone pricing power in negotiating external fees for expert advice, there will come a heavy cost to the public.
The devastating failure of Australia’s energy policy and spiralling prices for gas and electricity throw up a potent case in point.
It was recently reported that the Big Four accounting firms – PwC, EY, KPMG and Deloitte – picked up $2.6 billion over the past ten years for writing reports. That is from the federal government alone, to just the four top firms. They may have earned that again consulting to the states, though state disclosure is poor.
I lost interest when he stated "We elect governments to address collective issues that we can't fix as individuals".........economists just make this stuff up......we elect politicians to up-hold the constitutional rights of the people......I don't know what they teach people at Uni but it seems knowledge of our countries foundation is not one those things. Increasing the supply of houses is simple and it could have been done easily.....but the same people complaining about the housing shortage/affodablility are the same ones fighting to the keep the RMA and all the other Council and legislative nonsense........
Do economists not understand the number of hours involved in building a house......we either have immigration to help us build or we take everyone from unproductive enterprise across the country and place them on the building sites!
LOL - this is NZ mate, you can't just roll on up and build a house free market be damned. 'It would be too expensive to put services waaaay our here son'; 'well you could try you'll have to fork out your life's income in development contributions'; 'cheap housing you say, did you see our extensive building code?'; 'yeah, um council is not a fan of suburbs as such, can you redevelop something inner city perhaps?'; 'oh to preserve the feel of the inner city we'll need wheelchair access everywhere'; 'ah no, for safety reasons we'll need scaffolding for the first ten years of the buildings life'; ''Here, let me help you with this small truck of consent forms'; 'Sure, here's the phone number for resource consent'.
China is dishing out a tough lesson to currency traders and strategists alike: don’t bet against the yuan.
The currency has jumped to its highest level in seven months offshore, soaring as much as 1.1 percent on Wednesday alone, despite analyst forecasts for declines this quarter. Surging interbank rates are squeezing bears by driving up the cost of short positions. Read more
I guess they wish to enforce a transition from dependence on a USD centric credit based system (eurodollars) that has largely shrunk since 2008, together with China's economic growth path. Read more
Does this signal the coming of total de-dollarization? Perhaps. Starting February 2016, the PBOC moved in that direction but was apparently reluctant to go all the way. In terms of aggregate bank reserves, where there used to be 2 RMB in forex reserves (PBOC assets) for every 1 RMB in bank reserves (internal base money), at the end of last year after injecting trillions in RMB liquidity while forex assets continued to be destroyed ("dollars'), there was left just 1RMB in forex reserves for each RMB in base money. Source: Alhambra
Finally a world leader that hasn’t fallen for the ecoloons innumeracy and can read a satellite temperature graph. At end of day what sort of leader would sign up to a non-enforceable treaty that might cut global “average temperature” by 0.17 degrees in 2100 at the price of halving their industrial production next decade and then halve again the following decade? Not to mention cutting net emmissions from agriculture back to zero by 2050...
“To hit the Paris climate goals without geoengineering, the world has to do three broad (and incredibly ambitious) things:
1) Global CO2 emissions from energy and industry have to fall in half each decade. That is, in the 2020s, the world cuts emissions in half. Then we do it again in the 2030s. Then we do it again in the 2040s. They dub this a “carbon law.”
2) Net emissions from land use — i.e., from agriculture and deforestation — have to fall steadily to zero by 2050. This would need to happen even as the world population grows and we’re feeding ever more people.
3) Technologies to suck carbon dioxide out of the atmosphere have to start scaling up massively, until we’re artificially pulling 5 gigatons of CO2 per year out of the atmosphere by 2050 — nearly double what all the world’s trees and soils already do.”
https://www.vox.com/energy-and-environment/2017/3/23/15028480/roadmap-p…
“In a best-case, overly optimistic scenario it will cut global temperatures by just 0.17°C (0.3°F) by 2100.”
https://www.forbes.com/sites/bjornlomborg/2015/12/07/whats-the-price-ta…
It's not either or. On global scale the planet is greening. Perhaps read a bit more widely?
"Greening of the Earth and its drivers
Here we use three long-term satellite leaf area index (LAI) records and ten global ecosystem models to investigate four key drivers of LAI trends during 1982–2009. We show a persistent and widespread increase of growing season integrated LAI (greening) over 25% to 50% of the global vegetated area, whereas less than 4% of the globe shows decreasing LAI (browning). Factorial simulations with multiple global ecosystem models suggest that CO2 fertilization effects explain 70% of the observed greening trend, followed by nitrogen deposition (9%), climate change (8%) and land cover change (LCC) (4%). CO2 fertilization effects explain most of the greening trends in the tropics, whereas climate change resulted in greening of the high latitudes and the Tibetan Plateau. LCC contributed most to the regional greening observed in southeast China and the eastern United States."
http://www.nature.com/nclimate/journal/v6/n8/full/nclimate3004.html
https://phe.rockefeller.edu/docs/Nature_Rebounds.pdf
Exactly!
Profile has a "bit of a thing" about climate change so likes to dig up these factoids but chooses to ignore the obvious contradicting evidence: the CO2 levels and temperatures continue to break new records.
We have so many other issues caused by the extraordinary numbers of people including oceans full of plastic and other forms of pollution, habitat destruction and extinction of our fellow species that it is hard to believe anyone would applaud the fracturing of a global attempt to mitigate some of the damage.
Data published in Nature and Science now passes for "factoids" does it. Follow the links and rock your boat.
Neither CO2 nor temperatures continue to break new records - it warmed at a faster rate 1910-45 and the late 1800's than it does today. Just ask Phil Jones or compare satellite temps to historic rates of warming.
Punters always turn to plastic, fish, populations or other issues unrelated when barn door holes on runaway global theory are highlighted.
Here's a thought - imagine if the trillions to be spent on the Paris Treaty were instead spent on protecting habitat and saving at risk species. Rather than trying to prove a hypothesis by reducing 2100 temperature by 0.17 degrees. I know where I would prefer the money spent.
While I do have doubts about the efficacy of the various ET schemes, perhaps a straight out fossil fuels tax would be better (replacing income tax?) there is no doubt that CO2 is now over 400ppm compared to preindustrial 280ppm and that temperatures have continued to rise to new records. https://en.wikipedia.org/wiki/Temperature_record
https://en.wikipedia.org/wiki/Carbon_dioxide_in_Earth%27s_atmosphere
There are multiple references saying the same or similar. Please be aware that some of these plausible sounding sources are sponsored by industries and individuals with a vested interest in maintaining fossil fuel use. Rockefeller foundation?
I have a "bit of a thing" about it too;
http://business.scoop.co.nz/2017/05/26/new-zealand-set-to-blow-its-carb…
It's a totally cynical government that makes these commitments - and then binds its taxpayers to subsidise its private sector polluters..
Im unsure how you have disproved the "either or" bit.
Because simply if we "De-intensify" our pillage of resources in any way (or even stop intensifying..) the financial system starts to groan .... and at some point it will snap.
Capitalism only works if the future has a bigger energy burn than the past, otherwise promises related to debt don't work.
The real trouble I think is that we're being held to ransom by a few who stand to benefit from these older industries. For example, Trump pretends it's about jobs, but there are few jobs in coal (for example), with most of it automated - and far, far more jobs in renewables.
What exactly do you class as a "renewable".... Because it certainly can't include solar panels or wind towers - these dont magically renew themselves
There are plenty of jobs in coal (eg 29% of world energy usage) ... but as with Oil the price is at an unsustainably low level to continue...
https://en.wikipedia.org/wiki/Primary_energy
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