Here's our summary of key events over the long weekend that affect New Zealand, with news core data is actually more positive than the politics and views of what lies ahead.
Firstly, in the US, nonfarm payrolls rose by +223,000 in May, exceeding estimates handily. The jobless rate fell to 3.8%, the lowest rate in eighteen years. Wages rose +2.7% but their participation rate barely moved at a low 62.7%.
The release of American PMI indexes over the weekend brought mixed results. The closely-followed ISM one was up strongly to 58.7 while the more international Markit one was down slightly to 56.4 for the US in May. Take your pick.
New orders for American-made goods fell more than expected in April, weighed down by falling demand for aircraft and machinery. But other than for aircraft, the numbers actually look ok.
As part of the preparation for the G7 summit in Quebec later this week, the G7 finance chiefs issued a rare rebuke of a member nation, saying American trade actions undermine global economic confidence and threaten the effectiveness of the Western alliance. Is it now the G6, plus a reluctant US?
Canada's growth now exceeds +3% pa, making it the fastest growing G7 country. But the IMF is warning that those trade tensions put it under serious risk.
And the IMF has reviewed Samoa's situation. It likes their progress, but says it is at a high risk of debt stress, and very vulnerable to the witrhdrawal of correspondent banking relationships.
In Australia, CBA has agreed to pay a record fine of AU$700 mln to settle its AUSTRAC case. CBA says it submitted 19 mln reports to AUSTRAC including 44,000 tagged as suspicious during the period of the claim. But they missed 53,000 through a coding error in their ATMs and that included 149 reports that should have been tagged as 'suspicious'. It is these that attracted the AU$700 mln 'resolution'.
In Australia, data out yesterday claims that retail sales grew a bit more strongly than expected. For the year to April they were +2.7% higher than for the year to April 2017. They would have been higher, but were dragged down by declines by department stores.
And Melbourne has replaced Sydney as the worst performing national capital for residential property with prices falling by about -5% in the past three months, according to analysis by investment bank Morgan Stanley. Housing sentiment and expectations about prospects for real estate are plunging to near-record lows with most people nominating bank deposits a preferred option, despite low, single digit savings rates, its research shows.
The UST 10yr yield is rising again, now at 2.94% and up +4 bps on the day. The Chinese 10yr is at 3.67% (up +2 bps) while the New Zealand equivalent is at 2.77% (unchanged).
Gold is little changed overnight and just a touch under US$1,292/oz.
Oil prices have slipped back again by another -US$1/bbl to be just over US$64.50/bb, but the Brent benchmark is now just on US$75.50/bbl. The US$11 discount for US crude is holding (indicating a glut of American oil that is too much for their infrastructure to get to an export port). In China, about 28 airlines have started adding a fuel surcharge to their domestic fares.
The Kiwi dollar will start today more than +½c higher at 70.4 USc on a slipping greenback. On the cross rates we are a little weaker at 92 AUc because the Aussie has gained more, but little changed against the euro at just on 60 euro cents. That puts the TWI-5 up to 73.2 which actually is a new six week high.
Bitcoin is now at US$7,480 which is -2.8% lower than this time yesterday.
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33 Comments
The Doom and Gloom merchants into it already.
Get a life and worry about things that matter rather than worrying about property where people are financially comfortable.
If you have owned property for a few years then you will be fine, and opportunities are always there!
Frazz, every single property is up to code at least.
We provide very good accommodation at a fair and reasonable price.
We are able to do this due to buying right and being positively geared so we are able to maintain properties.
Thing is why do rental houses have to be fully insulated to,a standard and yet owner occupied property don’t have to be?????
It would be like owning a restaurant or other food business but deciding you don't want to comply with the food standards....
I don't have to deal with these at my house when I cook for myself or family because I'm not providing a product or service to a paying customer. But if I decide I want to sell it to other people, then food safety/standards apply.
Don't see why it should be any different for landlords who are providing a product/service to customers.
TM2 was driving down SH1, his cellphone rang. Answering, he heard his wife’s voice urgently warning him, "THE MAN, I just heard on the news that there’s a car going the wrong way on SH1. Please be careful!” “Hell,” said THE MAN, “It’s not just one car. It’s hundreds of them!”
https://www.commondreams.org/views/2018/05/21/coming-collapse
if we earned a sustainable income we would not have to borrow money to survive.
It is impossible for any doomed population to grasp how fragile the decayed financial, social and political system is on the eve of implosion. All the harbingers of collapse are visible: crumbling infrastructure; chronic underemployment and unemployment; the indiscriminate use of lethal force by police; political paralysis and stagnation; an economy built on the scaffolding of debt;
I have seen this before. I know the warning signs. All I can say is get ready.
He is talking about the USA. Lays it on pretty thick, I think this happens elsewhere well in advance of the USA.
Yeah, I was listening to some top US official explaining about the steel and aluminium tariffs, saying that, in the interests of national security, people need well paying jobs.
Never expected to hear that from the top echelon of a US administration within my lifetime, that's for sure.
If you dont have jobs all paper wealth is destroyed.
The economy needs jobs in front of it - not a valuation of jobs done behind it. Or in other words (energy dense) energy to burn in front of it, not embodied energy behind it. Which is why the meaningless paper wealth of all those Auckland houses wont save us.
We need to keep burning more fossil fuels to keep our (pretty much meaningless) jobs going.
We create (and maintain) wealth by burning ever greater quantities of energy - otherwise the Ponzi collapses.
Which is why we keep building more infrastructure, even though we can no longer afford to maintain what we have.
And the US is making sure the collapse hits the margins first while maintaining the core as long as possible
Resources and growth has hit a wall, so Trump is acting in Americas interests by changing the agreed rules - which up to now have been serving the American consumer quite nicely thankyou ( meanwhile as friends we got to chew on some of the excess carcass).
Sadly the carcass is now thinning ... so the Rest are helpless - they just cant openly admit that. Nobody wants to leave the table.
We are all slave to the might of the american dollar/military and the associated buying power of the american consumer
There was an article on Walmart's horrible practices last year - in 2014, Walmart pays the minimum wage to a majority of its retail workers in the US. The government provides public assistance to these low income earners in the form of food stamps. Most of these vulnerable workers end up exchanging their stamps for food at Walmart.
In other words, the US government incentivises Walmart and other retailers with its food stamp programme to underpay its staff.
When Trump announced cuts in food stamps to low-wage earners, analysts claimed that this could cost Walmart up to $12.7 billion in lost revenue. Further reports said Walmart might try to make up for the fall in profits through closing its brick-and-mortar stores, laying off more workers and increasing its online presence.
That is how screwed up corporate America is!
It's ok. The "free market" will fix it.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
Flash from forestry
https://www.stuff.co.nz/national/104442700/flooding-turned-a-tolaga-bay…
And recall that Nelson, especially west of the Takaka Hill, had a similar experience only a few months ago. That led to calls for stricter conditions on forestry practices on steep/erodible/upstream-of-towns locations.
Really calls into question the wisdom of short-rotation forestry, harvested the way it happens now (little attention to slash in gullies, less to creation of new gullies via haul lines and skidder/dozer tracks), on such country.
And, by extension, the fate of One Billion Trees, unless in these circumstances the intention would be to use slow-growing/native species, and then leave 'em alone for a few centuries.....
Bitcoin price reported but no news about it. Searches for bitcoin have dropped 75% since the peak price of around $19,000 USD.
Bitcoin gold loses millions due to a 51% attack and use of double spend to transfer bitcoin gold. This vulnerability exists for all cryptos.
https://www.ethnews.com/bitcoin-gold-network-loses-millions-from-a-51-p…
An actual explanation of what bitcoin is in a more accessible format. Don't "invest" in what you don't understand.
https://davidgerard.co.uk/blockchain/2018/04/19/welcome-to-the-blockcha…
That remains to be seen. There was something like 1600 coins/token last time I checked coinmarketcap. in 20 years maybe 5 of those will still be around.
And no, I feel that its mostly 7GW of wasted power generation, and however many tons per annum of extra CO2 emissions that are going to help screw over the planet for sod all benefit to the human race (or any other species).
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