Here's our summary of key events overnight that affect New Zealand.
America’s trade deficit increased to a nine-year high in February, with both imports and exports rising to record highs. The trade gap increased more than expected to US$57.6 billion. Exports rose 6.8% over the year, despite exports to China dropping 1.1%. On the import side, growth was up 10.1% with imports from China up 14.5% and Mexico 10.2%.
The news comes as the US tries to protect domestic industries by imposing tariffs on imports. Yet there’s still uncertainty around how many of the tariffs being talked up will be applied, and whether they will actually curb imports or simply increase prices.
The latest in the trade spat between China and the US is that the director of the White House’s National Economic Council has come out saying the countries will reach a deal bringing down barriers on both sides. Yet China is puffing out its chest; its state media saying it won’t surrender to external pressure and can win a trade war.
US stock markets are continuing to rebound from their dip earlier this week. The S&P and Dow are on track to posting their first three-day gains in about a month.
The big four Aussie banks have hit back at misconduct claims around their consumer lending businesses, made in the first round of the Banking Royal Commission. NAB for example says the Commission didn’t hear evidence from any customer affected by the supposed deception around its introducer mortgage referral programme.
Meanwhile ANZ says even if misconduct is found around a particular case involving it issuing a loan someone who suffered a brain injury, it would be unfair to conclude this was due to a broader cultural problem.
In New York, the UST 10yr yield has bounced up to 2.83%.
The US crude benchmark has risen to US$64/bbl, while the Brent benchmark is up above US$68/bbl.
Gold is down to US$1,325/oz.
The New Zealand dollar has weakened since this time yesterday to 72.7 USc, 94.6 AUc and 59.4 euro cents. The TWI-5 is down to 74.2.
The price of bitcoin remains in the slump it fell to yesterday. It’s at US$6,798.
Overnight the focus will shift to labour data in the US and a speech from the Federal Reserve chair on economic outlook.
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27 Comments
I read a book a while back by James Kynge, 'China shakes the world" and the challenge for America.
In it he quoted US estimates of up to 55,000 Chinese working in USA and leaking trade secrets back to their homeland.
In yr 2000 the USA corporates started to move production a way from the USA heartland to China and replaced it with jobs in god knows what. The USA productive capacity was hollowed out leaving areas that were once bustling with high unemployment and a meth epidemic.
https://www.ft.com/content/4a5074e6-e408-11da-8ced-0000779e2340
https://www.ft.com/content/5cf22564-5f2a-11e7-8814-0ac7eb84e5f1
The "Trade war" between US and China was to the very least extent about trade imbalance.
It is about US trying extremely hard, doing extremely cunning things, playing extremely dirty tricks to put extremely prickly obstacles to stop China from overtaking over its number one position in the world.
Dearest Andrew
Tariffs are not the way to dealing with China at all. Chinese are tough & shrewd
You obviously need an education
Trump talked of tariffs in the last century - the 1980s
No country does well using tariffs against another nobody wins
Reason why GWBush backed off quickly after his silly tariff meddling
Don't be so quick on jumping on the "blame the Asians" bandwagon. Nobody coerced the businesses in the West to capitalise on the wage differential but their own choice of short term profits over long term gains.
The West has suddenly woken up to the fact that to bring economic growth back they need to improve the wages and living standards of the domestic population; essential measures that have stagnated since the 80s. This is a problem entrenched so deep that it cannot be solved with all the cheap money and low interest rates in the world.
It was not a decision made by the average man.
"What changed in the early 2000’s was the willingness. Corporate executives throughout especially the dot-com bubble era got “paid” whether their companies made money or not (this was often literally the case). It all changed when the bubble went bust; suddenly, corporations and their executives who wanted to be compensated the same way via stock incentives had to find actual earnings and fast. Since economic growth, meaning top line revenue, was slack (it was a recession at first), the easiest route to profit growth (and hopefully resurgent stock prices) was for the industrial sector to move capacity to China in a big, big way."
http://www.alhambrapartners.com/2018/04/02/did-china-really-win-or-did-…
The average man can be held to fault for the move to low wage countries. These companies continue to make cheap elsewhere and sell to domestic consumers because we buy those products irrespective of where they are manufactured. Businesses can only produce and sell as long as there is a demand for stuff at the consumers' end.
The well-paying manufacturing jobs are continually being replaced with minimum wage logistics and retail jobs; and then we wonder where the wage growth has vanished.
Asvisor I agree
Too many here like J.C & Andrew believe their view as the only view
Youth springs over exuberance but not always much experience
I’ve lived in China & still must go there on semi regular basis
China will not be pressured by the moron Trump at all by tariffs
China has imposed tariffs on key republican states products !
I try to keep an open mind on China. I suspect like the West they are part of a Ponzi scheme but one they can afford to bail them selves out of, we don't have the reserves to do that.
I talked to guy in China earlier this year, his father runs a manufacturing business, he told me it's slowed up and that most money in China has been made from housing, however at least they make stuff we need.
I think China will negotiate, the USA will balance it's trade one way or the other.
Requiring foreign companies to hand over IP to be copied as part of setting up manufacturing in China would also qualify as dirty tricks, in most countries' books. Not that this is unexpected - theft of IP certainly played its part in the USA becoming an industrial powerhouse (not to mention that Hollywood's existence came out of the same drive to avoid IP costs).
Point being - both sides are using their dirty tricks and you have to realistically expect some conflict.
https://www.reuters.com/article/us-usa-trade-china-treasuries/china-hol…
https://www.theepochtimes.com/chinese-general-says-contain-the-united-s…
It pays to remember that some countries are broke, the USA,Japan, UK, a lot of the EU, most of South America and probably Australia and Canada too.
Wellington ratepayers pick up $98,000 cheque for council's lavish banquet
https://www.stuff.co.nz/dominion-post/news/102840947/wellington-ratepay…
I think that was Lavish Bank-u-ate....Andrew.J...
I see you have been very prolific, busy, widely read and this morning..
.I cannot be bothered anymore, cos you cannot keep a good spendthrift down in Polly-tics, Bwanking and Local Government coffers up, every one, and guess who coughs up in the end...plus a little interest...naturally.
I used to always put up the Friday Funny, but the twonks are just one big Joke ...these days.
So if you cannot beat em join em...I am going to become a Politician, can be bought by any Bank, can be a Save-e-awe to our fair country......provide a Public Service to all who have the dosh.
I will rebuild Christchurch, once Gerry is under the bed, and it has stopped rocking, rolling and making a big splash.
Will provide a real Foundation, building wise, all proceeds gratefully received.
Will ensure Insurance company benefits, so will I.
I'm trying to break the habit too , managed to knock a rib so a bit stuck at present. Thinking about a boat Bruce, something I can live on somewhere with good food and coffee but none of the 8k in rates i'm paying on 250 acres and due to go up another %20 this year.
Just got to convince the other half, she nearly drowned when she was four, the boat she was on sunk, got a free ride on a helicopter but that was after a couple of hours, so she gets a bit twitchy when she gets too far from land.
I feel a bit like Bruce
"China IP Challenges for Automotive Suppliers
anyone who has been living in a cave, the auto industry has changed, is changing, and is very much on the cusp of more change, much of this stemming from cutting edge and rapidly advancing technologies. Or to borrow from a mega-famous car ad, this is not your father’s auto industry."
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