Here's our summary of key events overnight that affect New Zealand, with news the trade/tariff landscape just got messier.
The US is to reimpose sanctions on Iran, but the EU is to shield its companies from the effects, trying to preserve a hard-won deal over Iranian denuclearisation. China has said it will ignore the sanctions, taking the opportunity to increase its oil imports from the country, actually diverting orders from the US. Threats and counter-threats of 'consequences' are everywhere - although generally markets are yawning.
In Germany, there was a data surprise. Factory orders slumped -4% month-on-month in June. This was the biggest fall since January 2017. Economists had expected orders to essentially hold steady. They even fell on a year-on-year basis which is unusual. June industrial production data, due tomorrow, is expected to show a small retreat after a strong jump in May.
Loan officers at American banks reported easing lending standards for business loans for firms of all sizes while keeping terms for commercial real estate loans almost unchanged in the second quarter, a Federal Reserve survey shows.
In Australia, the drive for prescriptive regulation is gaining steam (even if it seems to have failed in the past). Now regulator ASIC wants to embed is own appointed 'supervisors' within banks. You have to wonder who is going to be responsible for failure if something untoward happens on their watch.
And today in Australia, their population will tick over 25 mln. We are expecting the New Zealand population to reach 4.9 mln in September sometime.
The UST 10yr yield retreated on the US re-imposition of Iran sanctions and the potential fallout with the EU and is now at 2.94%. Their 2-10 curve has slipped to +28 bps. The Chinese 10yr is at 3.47% (down -2 bps) while the New Zealand equivalent is now just under 2.80%, down -3 bps.
Gold is down -US$5 in New York and now a just on US$1,208/oz and that is now an eighteen month low for the yellow metal.
US oil prices are a little higher today and now just over US$69/bbl. The Brent benchmark is now just over US$73.50/bbl.
The Kiwi dollar is starting today softer at 67.3 USc. On the cross rates we are unchanged however at 91.1 AUc, and at 58.3 euro cents. That puts the TWI-5 at 71.
Bitcoin is now at US$6.917 and down -3% from this time yesterday. We track this rate daily in the interactive chart below.
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18 Comments
Worried About The US?
The Debt Bubble Is Much Worse Elsewhere.
How Much Debt Do Countries Need To Create $1 of GDP?
In China, $6 for each $1 of GDP
In Australia, $9
Lacalle
https://pbs.twimg.com/media/Dj6S3w5XgAAP_87.jpg
The American stock market has been shrinking. It’s been happening in slow motion — so slow you may not even have noticed. But by now the change is unmistakable: The market is half the size of its mid-1990s peak, and 25 percent smaller than it was in 1976.
https://www.nytimes.com/2018/08/04/business/shrinking-stock-market.html
Related discussion on HN: https://news.ycombinator.com/item?id=17691248
Royal Commission: extortionate bank fees even on cash
https://www.michaelwest.com.au/royal-commission-extortionate-bank-fees-…
Re prescriptive banking regulations in Australia: how else would you describe the regulatory action that is needed?
You have banks that are failing to report regulatory breaches, doctoring legal reports, ignoring their anti money laundering obligations, charging fees to deceased customers, etc, etc, etc, etc, etc. The royal commission isn't a beat up. It's uncovering an industry that has it's regulation spread between multiple regulators, none of whom are actually regulating. Firm, prescriptive regulation and enforcement is needed, as well as clear responsibility between APRA, ASIC and the RBA.
China buying LNG from Iran is a sideshow: their import spread, according to Asia Times is Oz 47% (and due to increase), Qatar 22% and Malaysia 9%.
I agree with you. Trump wants EU to severe its oil and gas trade link with Russia and Iran in an attempt to get the Europeans to buy more from his friends operating in the Permian shale basin. Well tried Trump!
It won't work simply because American fuel arriving in vessels cannot compete with the price of Russian oil and gas supplied to Europe through pipeline.
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