Here's our summary of key events overnight that affect New Zealand, with news the Vatican is piling in with strong criticism of banking and finance.
But first, in the US, the number of births in 2017 fell for the third straight year to the lowest level in 30 years.
Canada added +30,200 jobs in April, led by hiring in professional and business services, trade, and manufacturing. But this was at a lower level than for March which was unusually strong, but substantially better than for April 2017.
Mexico reviewed its official interest rate this morning and has kept it at 7.5%. They have inflation running at 4.5% but it is falling.
Trade tensions are about to get serious between the US and the EU. The EU has said it will re-activate a law barring its companies from complying with US sanctions against Iran.
European car sales rose +9.6% in April, led by Toyota, Hyundai and Ford. Spain (+12.3%) and the Britain (+10.4%) recorded the strongest growth, followed by France (+9.0%), Germany (+8.0%) and Italy (+6.5%).
Argentina is not the only emerging market in trouble. Turkey is as well, with their currency now valued at a record low. Its central bank, whose independence is under threat from a strongman ruler, has been forced to issue a "we will take all necessary steps' statement.
And Italy is facing an economic confidence crisis as well. As coalition government negotiations drag on, it looks increasingly likely fringe parties on either extreme may wield power, and they want to reject EU debt restraints. Investors are marking down Italy's prospects.
The Vatican has called for more regulation of markets and financial systems. They say economic crises showed financial markets were not able to govern themselves properly and they require a "strong injection of morality and ethics" by regulation. They were particularly critical of derivatives trading.
In China, house prices are slipping, and the pace of the falls - still quite minor though - is picking up. In the important city across the border from Hong Kong, Shenzhen, the fall is a notable -2.2% in a year.
The surprising change of government in Malaysia was a rejection of a deeply unpopular leader. One of his policies was to introduce a 6% GST, and the opposition promptly cancelled that tax on gaining power. However, they are moving to replace it with a "sales & service tax" (SST) which is signaled to be at variable rates between 5% and 15%. They will have a substantial fiscal hole until the new tax is in place and working properly.
Indonesia has raised its benchmark interest rate by +25 bps to 4.50%, in response to the same currency pressures affecting Argentina and Turkey.
Australia posted another small gain in labour force participation, taking it to 65.7% which for them is a "record high". But that is far below New Zealand's 71.2%. Unfortunately for them, this drawing of more workers to their labour force has resulted in a small rise in their unemployment rate to 5.6%. The good news however is that 32,700 new full time jobs were added in April, while -10,000 part-time jobs were shed.
The UST 10yr yield is now at 3.11%, up +1 bp today. The Chinese 10yr is at 3.73% (up +1 bp) while the New Zealand equivalent is at 2.87% (up +5 bps).
Gold is staying low at US$1,290/oz in New York, down marginally.
Oil prices are pretty settled today, albeit at a high level and are now just under US$71.50/bbl in the US and the Brent benchmark is now just under US$79.50/bbl. In European markets, it is now over US$80/bbl.
The Kiwi dollar has brushed off its budget bump and is now down again at 68.8 USc. On the cross rates we are down there too at 91.6 AUc and at 58.3 euro cents. That puts the TWI-5 back to 71.6.
Bitcoin is now at US$8,258 and that is down less than -1% from this time yesterday.
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36 Comments
Interesting, thanks for the link. Shocking actually. From the outside, it seems to me that what has been referred to as the "deep state" is a huge threat to social harmony/democracy there.
PS - did you see the $85m allocated in the budget to Mbovis response?
http://www.sharechat.co.nz/article/1064e006/budget-2018-mycoplasma-bovi…
Fed Farmers' response as well;
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
Crikey, even the New York Times have finally figured out that the EU has metastasized into the German Empire.
The Italians figured it out in 2011 when the EU appointed their Prime Minister for them and one newspaper ran the headline QUARTO REICH with a picture of Angela Merkel:
http://i.dailymail.co.uk/i/pix/2012/08/06/article-2184447-14693B9B00000…
That has to be the most explosive newspaper headline in recent years. Article in English here:
http://www.dailymail.co.uk/news/article-2184447/Italian-newspaper-owned…
Think of people , Glass Houses and stones .
As a Christian , I feel the Catholic Church should stick to looking after people's spiritual well-being keep their own house in order and not preach about morality and ethics in financial markets .
I speed - read the lengthy diatribe they have put out , and as a born cynic , I suspect their investments have probably been burnt by derivatives trading , hence the indignation .
I will have to disagree with your theology Boatman. How can you divide "spiritual well-being" and "morality and ethics in financial markets". The spiritual well-being of persons includes acting ethically in all areas of life. There can be no compartmentalism in a truly integrated and moral life. Such divides usually end up in good people do truly evil things.
Also if you read the document you would have seen that the CDF was not against derivatives per se - reducing risk is a positive. Rather, their concern was the complex derivatives such as credit default swaps that are so complex few actual understand the effects and also create perverse incentives.
I think if we incorporated this document into our financial environment we would indeed have a much more just society.
" I feel the Catholic Church should stick to looking after people's spiritual well-being "....
Lesson 101: Financial stability is one of the crucial elements in a Family's wellbeing.. both mentally and spiritually... the financial system is so wrecked, its causing a number of families to split....
time to get your house in order!!!!
Thanks, I have - the conclusion suffices: ....uniting indissolubly all the actions of good will in a web that unites heaven and earth, which is a true instrument of the humanization of each person (..a humanistic pagan religion), and the world as a whole. This is all that we need for living well and for nourishing a hope that may be at the height of our dignity as human persons.
The Church, Mother and Teacher, aware of having received in gift an undeserved deposit, offers to the men and women of all times the resources for a dependable hope. Mary, Mother of God made man for us, may take our hearts in hand and guide them in the wise building of that good that her Son Jesus, through his humanity made new by the Holy Spirit, has come to inaugurate for the salvation of the world. (as i said - humanistic religion).
I'm not so sure that "As a Christian..." and "...as a born cynic" are compatible, Boatman.
Not much point in banging on about financial morality, or any other type of morality for that matter, when you have the like of Trump sitting on top of and dishing out from, the mammoth sized economy of the USA. For example I believe California, Texas, New York state economies each are larger than that of Russia and three or four others are not far behind. So if Trump decides to indulge himself in pet projects and personal bias, domestically and internationally, then the consequences will roll out whether they are moral or not.
Well they used to say sport and politics should never be mixed but that did not hold up for too long. Trump has political power and Trump has financial power. It would be beyond naive to think that the politician and the financier don’t sleep in the same bed. For example, the intended relaxation, dismantling if you like, of the Wall St restraints imposed after the GFC by the previous administration are hardly divorced from political expediency, personal self satisfaction probably too, one could quite easily contend.
If you're talking the Biblical God, he/she is always on the side of the oppressed.
Proverbs 22:22-23: Do not rob the poor because he is poor, Or crush the afflicted at the gate; For the LORD will plead their case And take the life of those who rob them.
Deuteronomy 24:19-21: "When you reap your harvest in your field and have forgotten a sheaf in the field, you shall not go back to get it; it shall be for the alien, for the orphan, and for the widow, in order that the LORD your God may bless you in all the work of your hands. "When you beat your olive tree, you shall not go over the boughs again; it shall be for the alien, for the orphan, and for the widow. "When you gather the grapes of your vineyard, you shall not go over it again; it shall be for the alien, for the orphan, and for the widow.
Matthew 25:34-39: "Then the King will say to those on His right, 'Come, you who are blessed of My Father, inherit the kingdom prepared for you from the foundation of the world. 'For I was hungry, and you gave Me something to eat; I was thirsty, and you gave Me something to drink; I was a stranger, and you invited Me in; naked, and you clothed Me; I was sick, and you visited Me; I was in prison, and you came to Me.'
I really don't think the Bible lets you off the hook when it comes to morality and ethics in business, treatment of people who work for you, or how we approach poverty.
No but in terms of the hook it is easy enough to let yourself off the it. For instance from observations, living and working in the USA, it is not an uncommon practice to trash and exploit your co-worker or whoever, whenever opportune during the week, proceed to church in the weekend and absolve yourself, and start the whole process over again on Monday.
I see big drops in UK newspaper readership, crikey Daily Telegraph lost nearly %20 of it's readers, daily Mirror %17.
The falling birth rate in the USA has to unleash deeply deflationary forces. Too many young are struggling just to survive let alone think of starting a family.
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