Here's our summary of key events overnight that affect New Zealand, with news that the denouement of bitcoin seems to be happening.
But firstly in the US, there was a very positive PMI report out earlier today from the ISM. They say new orders, production, and employment continue to expand. But supplier deliveries are slowing, raising backlog issues. They also see raw material inventories growing and prices rising at a faster rate.
North of the border, Canadian negotiators are becoming frustrated with the NAFTA talks and the US's zero-sum view of trade. As the talks drag on, the prospects for a resolution are dimming.
In Argentina, their central bank is fighting high inflation - and apparently losing. It hit 21% in 2017, far above the target 15%. But yesterday, the bank relaxed its goals and sent markets a very mixed signal about their commitment to fighting high inflation. It had an official cash rate of 28.75% but cut it recently to 27.25%.
There are elections next year in India. This year the Government is getting prepared and today's central government budget has an unusual policy - that Indian farmers are to be paid at least paid at least 1.5 times the cost of their crops as part of a program to double farmer incomes by 2022. India may need higher import duties to achieve that.
Global air passenger travel was up +7.6% in 2017 compared to 2016 with international travel up +7.9%. In the Asia/Pacific region they were up +9.4%. December month growth was a little softer than these annual growth rates however. And remarkably, the largest global share of international air travel is from the European region, accounting for nearly a quarter of all air travel. Asia/Pacific is next at almost a fifth. North Americans only account for a twelfth of international air travel.
In Australia, APRA has released an interim report on its culture at banking giant CBA. The report essentially says nothing other than big banks are complex beasts. They are trying to understand the dynamic between CBA’s financial success and any shortcomings in its responsiveness and management of risk. They say after all the detail work, surveys of 10,000+ staff, interviews with 100+ senior managers and targeted focus groups, and consultation with outside agencies, they don't have anything significant to report yet.
The UST 10yr yield is unchanged at 2.74%. The equivalent 10yr China sovereign bond is down however, just a little at 3.93% (-1 bp). The equivalent NZ 10yr sovereign bond is up +1 bp to 2.94%.
Oil prices are up about +US$1 today and now just over US$65.50 a barrel, while the Brent benchmark is now under US$69.50.
Gold is marginally firmer at US$1,342/oz.
The Kiwi dollar starts today higher however at 74 USc. On the cross rates there are also small rises and we are now at 92.1 AUc, and against the euro at 59.2 euro cents. That puts the TWI-5 just on 74.6 and its highest since early October.
Bitcoin is now just under US$9,000 and is now at US$8,971 a steep -10% drop in the past 24 hours. It looks like markets have decided the US$10,000 level is not sustainable and there is a rush to the exits. Not helping is a new Facebook ad ban for the cryptocurrency and India's regulatory clampdown.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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16 Comments
Wellington universities sound warning on their reaction to rental price gouging:
https://www.radionz.co.nz/news/national/349444/wellington-universities-…
Wellington students are suffering as the availability of rentals in the city declines. Some are being asked by landlords how much more rent they're willing to pay to secure a flat.
Victoria University's vice chancellor Grant Guilford said the university was looking at building accomodation for students beyond the traditional halls for first years.
"We feel that this is ongoing evidence of landlords gouging our students in price, then we are willing to enter this market for post-first-year students and to do so with the intent of resetting the pricing at fairer levels.
"I would like to sound a warning, if I could, to the landlords that we are willing to intervene in this market if there is evidence of ongoing gouging."
I think that universities have the scale and the funding to make a real challenge to the student rental market. It will be interesting to see what's going to happen.
Good grief, as if the thousands of landlords providing flats to students will collectively give a toss about what the University says it might do in years to come. Halls of residence are hardly a bargain and most students can’t wait to get out of them after the first year. Victoria Uni, if you are serious, which I doubt you are, you would just do it.
we are now looking at going backwards, where to get people to work in the services you had to supply housing for them, its still that way in the country areas with police, teachers, but how long before in the city the hospitals rebuild nurses accommodation , police barracks etc
Until there is an effective solution to those parasites who call themselves landlords, that makes housing everywhere affordable, what choice is there? Subsidies only encourage the parasites, and successive Governments are demonstrating they haven't the courage to regulate.
Universities are not innocent when it comes to fleecing their clientele (students, as we don't hear about the others). there certainly seems to be a culture of entitlement amongst academics, not to mention one of superiority! But this comment was solely about housing and yes I am hugely offended by the number of people every where who are struggling to pay for housing for no fault of their own! I am hugely offended by the $2 billion in subsidies that go to landlords every year, and the refusal of Governments to act on behalf of their lowliest of constituents. And finally I struggle to understand the eternal ability of the greedy to put their own interests ahead of their communities.
Amazon has been granted patents for employee wristbands, which would track workers and tell them where to go.
The wristbands, which Amazon filed patents for in 2016, would be able to “pinpoint the location of warehouse employees and track their hand movements in real time,” while managers would be able to monitor their performance, according to the Verge.
“The proposed system includes ultrasonic devices placed around the warehouse, the wristbands themselves, and a management module that oversees everything,” they explained. “The wristbands also feature an ultrasonic unit that’s used to track where the worker is in relation to any particular inventory bin. If their hands are moving to the wrong item, the bracelet will buzz.” Read more
Them and us?
On the cross rates there are also small rises and we are now at 92.1 AUc...
Hmmmm..
Positive points on AUD/USD forwards beyond 4mths influencing matters?
I just read this rather than listened, and it appears voice recognition has been used to convert it to text due to the errors.
Duncan presents with a logical clarity as usual. It doesn't look good for asset prices as liquidity is withdrawn, but even Duncan can't explain why the USD is down as interest rates go up.
https://www.theinvestorspodcast.com/episodes/tip173-stock-market-melt-u…
Rather amazing actually. It was only a month or so ago that you were scoffing at nocoiners. There is zero underlying value in cryptos of all types. I do have to give a tip of the hat to the people that started this concept. It is rather unbelievable that there are so many greater fools with money to burn. As I write, the price of bitcon is currently at around $8k, another 10% drop on top of the 10%+ decline noted just a few hours ago. I suspect that there will be some strong support at $0 level.
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