Here's our summary of key events ovenight that affect New Zealand, with news that the trade fears seem to have evaporated today.
On Wall Street, stocks have rebounded as investor jitters over restrictive trade policies around the world moderated. The S&P500 is up +1.5% so far in today's session.
And China is rallying WTO members to reject the US approach to settling trade disputes. However, China is also accelerating moves to open up its financial and services markets, and is easing the way to buy more US semiconductor products.
Markets are betting the trade rift between the US and China will be mended quickly and that the US is all bark and no bite.
In New York, the outgoing head of the New York Fed says he wants to see banks required to adopt pay plans for senior managers that discourage excessive risk-taking and place greater onus on them for wrongdoing. In fact, he wants most of the long-term compensation deferred, and paid in loss absorbing capital instruments. (And it seems likely that the next head of the important NY Fed will be John Williams, the current head of the San Francisco Fed.)
The Dallas Fed is reporting a sharp drop in the pace of business in their region. But the Chicago Fed national survey is seeing a rise in activity.
One of America's oldest and largest gun makers, Remington, has filed for bankruptcy protection. It has been hard hit by slumping sales and future prospects look bleak.
In Beijing and the country's north-east generally, they are under a major smog alert, the third of 2018. Trucks have been ordered off the road.
China needs more water so it is testing cutting-edge defense technology to develop a powerful yet relatively low-cost weather modification system to bring substantially more rain to the Tibetan plateau, Asia’s biggest freshwater reserve. The system, which involves an enormous network of fuel-burning chambers installed high up on the Tibetan mountains, could increase rainfall in the region by up to 10 billion cubic metres a year – about 7% of China’s total water consumption – according to researchers involved in the project.
In France, after ten years of trying, they posted a 2.6% public-debt-to-GDP ratio in 2017, the first time since 2007 it has been within the 3% limit set by the European Union.
The UST 10yr yield has firmed +3 bps overnight, back to 2.84%. But the Chinese 10yr is at 3.74% (down -2 bps) and the New Zealand equivalent is at 2.81% (down -3 bps).
The gold price is up another +US$7 in New York today and now at US$1,354/oz.
Oil prices have slipped slightly with the US benchmark now just over US$65.50 and the Brent benchmark just over US$70/bbl.
The Kiwi dollar will start today at 73 USc,or more than ½c higher over the past 24 hours. On the cross rates we are still at 94 AUc and at 58.6 euro cents. That puts the TWI-5 at 73.8 and a one-week high.
Bitcoin is down sharply at US$7,890 which is -7.5% lower than this time yesterday.
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14 Comments
Agreed. China has assumed a hypocritical position here having never put its arms down in the first place.
The American business elite are also to be blamed for their burgeoning trade deficit. They chose short-term profits from manufacturing overseas and shipping into the US with full knowledge that this would destroy the American middle class.
Can the Guardian make the connection between industrialisation of EU farming and centralisation of decision making? The EU is a horrid mess of centralisation, favouritism, elitism, colonisation (of southern Europe and Ireland) yet the lefty types still see it as the bees knees. Dieselgate is just the logical outcome of their approach. As is the wanton destruction of the French countryside and culture.
Roger that is such a reality that the only way the continent can cope with it, is to simply not see it, or hide it. Like in the 1980’s with the beef mountains, where they paid processors to build hundreds on hundreds of cold stores to hide it in. Ironically Russia solved the problem by steadily consuming it, they too were probably paid to do so. Those who were around in the commodity markets in those days, can fully understand Brexit.
China's weather modification:
They also burn fuel as cleanly and efficiently as rocket engines, releasing only vapours and carbon dioxide, which makes them suitable for use even in environmentally protected areas.
I await the arrival of the protesters, the denouncements at the UN and other impotent gatherings , and the Middle Kingdom's raised Middle Finger to 'em all.....
No one mentions the fact they cut all the trees down.
What will be the consequences of their weather modification on the rest of the world? Has anybody asked, or is even interested? Given that atmospheric water is a cause and consequence of global warming, it may actually be a benefit.
Just to head off the questions; cause because water in the atmosphere absorbs and retains heat, and as the atmosphere warms up, it can hold more moisture. CO2 just lets more heat from the sun through.
China and coal ... they must burn more despite the side effects
Gail tverberg https://ourfiniteworld.com/2018/03/13/our-latest-oil-predicament/commen…
:China is the country that has been pulling the world economy along. It could not do that with shrinking coal supply, that it had in 2015 and 2016. It raised its coal consumption. This (together with a lot more debt to enable the growth in coal consumption) is what saved the world economy from collapsing.I see coal as the key type of energy supply, because it acts to keep the average price down. With a lower average price of energy, it is possible to increase supply.
China is moving to LNG like the USA
http://www.afr.com/markets/commodities/energy/soaring-china-demand-coul…
https://www.reuters.com/article/us-china-lng/china-becomes-worlds-no-2-…
https://www.cnbc.com/2018/02/09/cheniere-energy-cracks-into-chinas-boom…
http://petrowiki.org/Liquified_natural_gas_(LNG)
And before we all get excited about running out of oil they have lifted the reserves in tar sands of Canada from 5 billion barrels to 130 billion barrels and the USA has 100 years of gas reserves. The global use of oil per head has been stable since 1985.
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