Here's our summary of key events overnight that affect New Zealand, with news the slow sagging of the US economy extends.
Firstly, American economic growth was slightly weaker than initially thought during the fourth quarter, at +2.5% pa, and is on track to slow in the beginning of 2018.
And US pending home sales volumes cooled considerably in January to their lowest level in over three years.
Further, early reports are that American car sales in February are expected at the 1.3 mil sales level, about -2% lower than for the same month a year ago.
The US Commerce Department is threatening some Chinese aluminium firms with duties of between +50% and +100% on their products imported into the US. China's aluminium industry is having a rough ride at present.
In a worrying sign, the official Chinese PMI data slumped for February, far below January and far below analysts expectations. It's their sharpest fall in six years. Their factory sector hit a 19-month low, and the still-expanding areas of services and construction both lost momentum. Most worryingly, small and medium manufacturers reported in with contractions.
India’s economy grew at its fastest pace in more than a year last quarter. Their growth was +7.2% in the December quarter, up from +6.3% in the September quarter and +5.7% in the June quarter.
Meanwhile, EU inflation cooled further, up just +1.2% in February and down from +2.0% in the same month a year ago.
And staying in Europe, their food safety authority says most uses of neonicotinoid pesticides represent a risk to bees and will make a temporary ban permanent. These pesticides are still available in New Zealand even for domestic use.
And if the Americans widen their trade war with China to the EU, trade ministers there have agreed to retaliate. They are drawing up a list of US products to target, including orange juice and bourbon.
In Australia, the removal of work options after graduating has seen a sharp fall in foreign students applying to study there.
In New York, the UST 10 yr yield is down -3 bps to 2.89% on the GDP outlook. The rising costs of hedging are making US Treasury purchases by foreigners unattractive.
The gold price is holding its sharply lower level, bouncing up a minor +US$3 to US$1,318/oz today.
Oil prices are a lower again today too with the US benchmark now just over US$62.50/bbl and the Brent benchmark over US$66/bbl.
The Kiwi dollar will also start today little changed from yesterday at 72.3 USc. On the cross rates we are at 92.6 AUc and at 59.2 euro cents. That puts the TWI-5 marginally lower at 73.6.
Bitcoin is now at US$10,500, down -1.0% from this time yesterday.
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19 Comments
china is reported to be stalling Australian exports as retaliation
https://www.smh.com.au/politics/federal/australia-has-woken-up-the-worl…
http://www.abc.net.au/news/2018-02-27/chinese-state-media-labels-austra…
Still, the process of review, consultation, submissions, commissions, investigations, research, advice, public hearings, special committees, and general discussion has at least begun. We did not allow ourselves to question anything to do with our immigration policy until 12 months ago, because it smacked of racism. It is a complicated subject and I'm not sure we have identified all the moving parts as yet. With a bit of luck, we might be able to figure out a better way forward at some point in the next ten years. There is at least a 15% chance.
Just heard Bostok Hawkes Bay HR manager on National Radio stating they expected 100 backpackers this am - got 10 so short of 1000 bins a day output. Big dollars as fruit has to be harvested when ripe.
More migrants ?
Still plenty of unemployed in the area - maybe the old carrot and stick needs a bigger stick.
Let's see Labours response as this is quite serious and a hit on desperately needed exports judging by the latest trade figures.
At the same time they are trialing automation.
https://techcrunch.com/2017/05/03/abundant-robotics-rakes-in-10-million…
While the family orchard os consigned to the history books, same as vineyards.
Whatever happened to the idea that if there was work available and the unemployed chose not to do it that the benefit was suspended or cancelled? Plenty of unemployed here in Hawkes Bay - who look perfectly capable of picking fruit to me - who choose not to do so, for whatever reason. Choosing not to do something is fine.....but there should be a clear consequence of such - they no longer receive the benefit.
When I was young and unemployed, the Labour Dept used to run buses out to Te Puke to pick kiwi fruit. If you were young and fit you were told to report to the office early the next morning and off you went.
But then the 'Spittle Spit' crowd decided that the dole bludgers weren't being punished enough, so in came the claw backs and stand down periods etc.
Isn't it wonderful how knee jerk regulation can stuff things up!
Anybody got a spare 200ha? Got an email from MPI yesterday. "If you are interested, please contact Crown Forestry immediately:" Immediately I tell you! There hasn't been a boondoggle like this since Muldoon's supplementary minimum prices.
How many backpackers will needed to plant 100,000 ha this June-September?
Poor simple/God Emperor politicians who think they can change the climate by government decree.
Is see Mike Hosking having a go at the Labour Government and Kiwibuild. Mike doesn’t like Labour what a surprise. And he complains about the media giving them a free pass based on the leaders popularity - wow, he has obviously forgotten his fawning over John Key.
But this is not what I came to say.
They say FHBs won’t be able to afford $600,000 kiwibuild houses. Putting aside that this price is a hell of a lot more affordable than general Auckland house prices, I say who cares.
The objective of kiwibuild should be as I see it are to:
• build more houses
• reduce the overall cost of building (by sparking new methods, economies of scale, demand and financing certainty and reductions in material costs
• improve affordability for all people
With this is mind, who cares if FHBs can afford these specific houses? Measure success by whether houses get more affordable for FHBs.
Finally, I therefore recommend they sell a house to a FHB for $600k, a person who commits to reside for two years (or pay a penalty) for $650,000, and an investor for $700,000.
If the government is making a profit at $600,000 - which they should be for this to work, then why not increase that profit and reinvest it in more houses?
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