Here's our summary of key economic events overnight that affect New Zealand with news the rise of the US economy and the slowdown in China that Beijing can't seem to arrest is twisting a vast cast of supporting economies and their currencies. The NZD and AUD are devaluing faster now.
First up today, the giant American economy grew much more than expected as reported by their 'advance' Q2-2024 release. It was up +2.8% when +2.0% rise was expected after the Q1-2024 +1.4% expansion. This was driven by strong consumer spending which broadly confirms the weekly retail impetus that we track. Consumers are acting 'positively'. Growth of +2.8% is 'moderate' in the grand scheme of things - until you realise that it is a +US$360 bln (nominal) expansion from Q1, almost +US1.6 tln from the same period a year ago. Nowhere else has expanded like that (and more than double China's +US$784 bln equivalent expansion). The American economy had economic activity of US$28.6 tln in the past year.
Prices (PCE) were up +2.6% in Q2, a lesser rise than the +3.4% rise in Q1. Getting there, but not there yet.
Meanwhile, US initial jobless claims fell more than expected last week at 225,000 from the 281,000 of the prior week. These levels are nearly back to where they were a year ago. There are now 1.9 mln workers on these benefits, a tiny slice of their 161 364 mln workforce.
But new orders for durable goods slumped -6.6% in June from May, after four consecutive monthly increases and missing market expectations of a +0.3% rise. Transportation equipment drove the decrease. From a year ago, these durable goods orders were down a startling -11%. Orders for capital goods were worse, down -27% on the year-ago basis. (However, excluding aircraft, there was little change.)
The next July regional factory survey is from the Kansas City Fed, and they reported little-change from June. Basically it mirrors the national durable goods order data.
Earlier today there was a well-supported UST 7yr bond auction and that brought a 4.11% median yield. That is slightly lower than the 4.22% yield at the prior equivalent event a month ago.
China's central bank unexpectedly cut the rate at which it lends to financial institutions, the first such cut in nearly a year. It lowered the one-year medium-term lending facility (MLF) rate to 2.3%, from 2.5%. The bank issued ¥200 bln in loans to banks at this rate.
This rate cut is part of Beijing's attempts to spur a sluggish economic growth. This was just a part of actions taken yesterday. It is also expanding a subsidy program to get more people buying cars and consumer electronics. This will cost them ¥300 bln, paid for out of their issue of ultralong special treasury bonds. The subsidies for those trading in their passenger cars for new energy vehicles will double to ¥20,000, compared to the ¥10,000 subsidy announced in April. Trade-ins for petrol vehicles will rise to ¥15,000 from ¥7,000 per vehicle.
Global container shipping rates stayed very high last week, but they did slip a small -2% from the week before and are just off their peak. That makes them +268% higher than a year ago. There seems no relief in sight yet. Bulk cargo rates were little-changed last week to be +24% higher than year-ago levels.
The UST 10yr yield is now at just on 4.27% and down -2 bps from this time yesterday. The key 2-10 yield curve inversion is now at -18 bps. Their 1-5 curve is slightly less at -70 bps. And their 3 mth-10yr curve inversion is holding at -112 bps. The Australian 10 year bond yield starts today at 4.33% and down -4 bps from yesterday. The China 10 year bond rate is softish at 2.23%. The NZ Government 10 year bond rate is now at 4.46%, and up +2 bps from yesterday.
On Wall Street, the S&P500 has rebounded somewhat in Thursday trade, up +0.2%. Overnight, European markets were quite mixed with Paris down -1.2% while London was rose +0.4%. Yesterday, Tokyo closed down an eye-watering -3.3% and Hong Kong fell another -1.8%. Shanghai was down another -0.5% in its Thursday trade. Singapore was down -0.9%. The ASX200 fell -1.3% in Thursday trade and the NZX50 was down -1.1%.
The price of gold will start today down a very sharp -US$60 from yesterday at US$2352/oz. That is down -2.5% on the day.
Oil prices are +50 USc firmer at just over US$78/bbl in the US while the international Brent price is just on US$81.50/bbl.
The Kiwi dollar starts today weaker, down another -40 bps at just under 59 USc. That is a -3.4% devaluation since the start of the month. Against the Aussie we are down -10 bps at 90 AUc. Against the euro we are down a full -½c at 54.3 euro cents. That all means our TWI-5 starts today at 68 and down -40 bps from yesterday and that is near a two year low.
The bitcoin price starts today at US$64,827 and down -2.6% from this time yesterday. Volatility over the past 24 hours has been moderate, also at +/- 2.6%.
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101 Comments
The US economy is outperforming the NZ economy. For the people claiming that the reserve bank should wait for the fed to cut the FFR before we cut our OCR, please consider that a currency doesn’t derive strength solely from its central bank rate. The Mexican peso has a central bank rate of 11% just as an example.
Agreed. Too many pub economists in NZ.
'economist' isn't a protected term. Like nutritionalist, astrologist, and psychic.
Hahaha, that's possibly the the dumbest economic statement I've ever read, who wrote that, One Roof?
Mexico's cash rates is at 11% because of capital outflows, high inflation and a steadily depreciating currency. You should call Erdogan, he had the same bright idea, hahahaha
I’m not sure I see the correlation between the comment and one roof, nor housing in general. The reason that the Mexican central bank rate is at 11% is absolutely irrelevant, however the point remains that it does not automatically equate to a strong currrency.
The point also remains that the argument to keep our OCR high to prevent our dollar devaluing relative to the USD is seriously illogical given the underlying strength of the US economy currently relative to ours. Especially considering the further deterioration of our economy that the high OCR will cause.
Your reference about Erdogen appears to be misplaced given I am not promoting his values.
I’m sorry if this upsets you. That was not my intention…. maybe go for a walk or get a drink of water.
however the point remains that it does not automatically equate to a strong currrency.
Not really true, Ceteris Paribus it does. Where would the Peso be if cash rates were 5%? A whole lot weaker leading to a currency crisis and inflation shock. Mexico is a bad example, it has 35% of debt denominated in foreign currency (mostly US$). It has a history of currency crisis, it is rated BBB and many, many more factors that mean you cannot look at the cash rate and draw the hypothesis that a high cash rate is not correlated to a strong currency.
You’re still debating an argument that I never made. I don’t wish to fight with you regarding the merits of your argument because I never said that the central bank rate is not a factor in a currencies strength.
A currencies value is derived from a number of factors as interpreted by the market. The weaker our economy gets as interpreted by “the market ” the riskier/weaker our dollar will become as investors weigh up downside factors. An artificially high rate of return for FX investors will not sustain a strong dollar without a stable economy underpinning the investment. Unfortunately the risks prevalent with our broad weakness and sustained negative growth results/outlook (per capita especially) would be risks a prudent FX investor would 100% weigh up. Regardless of how much you wish that wasn’t true!
It's never a fight, always a discussion. The point you posted makes the argument that Mexico's high cash rate has not lead to a strong currency ergo we should cut rates. We both agree that's an unsound conclusion and likely from someone who doesn't understand economics or has a vested interest for lower rates.
No. You are putting words in my mouth to suit your strange desire to “discuss” things with me that I never said.
I did not say we should cut rates!
For the record I do think we should cut and should have done so months ago.
Mexico is a bad example, it has 35% of debt denominated in foreign currency (mostly US$). It has a history of currency crisis, it is rated BBB and many,
A little bit different but Japan's credit rating was the same as Botswana's in the early 2000s. These rating agencies are stacked with people conditioned in Anglosphere dogma.
Did JPY collapse? At the time, it was relatively strong. It did weaken but not drastically so.
Japan's credit rating could fall below Botswana's
Multibillion-yen 'rescue' receives resounding raspberry
https://www.theguardian.com/business/2002/feb/27/japan.internationalnews
The point is that other factors besides the central bank rate contribute to the value of a nations currency. You listing those factors does not disprove the example 🤦♂️
This will cost them ¥300 bln, paid for out of their issue of ultralong special treasury bonds
It won't actually 'cost' China anything at all of course - other than the real resources that the spending will call on. Govt bonds are just interest-paying term deposit accounts at the Treasury (or equivalent) that can be traded on financial markets. When countries like China run a major trade surplus, they have total control over monetary policy and can run deficits to the moon.
So you're saying we should let the NZD fall ... So imported goods rise in price ... So we import less and buy more local ... So we end up with a trade surplus which pumps new money into the economy ... So we stop getting further and further into debt (both public and private) ... So the rot stops and our standard of living slowly improves?
Whether we like it or not, I see the first parts as inevitable, and inflation be damned.
Our dollar will drop
And we'll just get a low interest loan to pay for the more expensive imported goods.
The kids can pay, it'll be sweet.
There are considerations other than imported inflation however.....what happens to the churn of tourism if Kiwis are unable to fill those outgoing seats? While tourism may not be a great net earner (when everything is tallied up) it does provide demand for NZD and provide frequent access to our markets from the end of the line.....attempting to maintain that sweet spot is akin to alchemy.
We think it's science.
But it's more like trying to adjust some shitty rabbit ears on an old TV.
We'll settle on a fuzzy image with half decent sound.
Pa1nter: "And we'll just get a low interest loan to pay for the more expensive imported goods."
NZ is not the USA.
Overseas lenders are financing our lifestyles. They're happy to do this for the USA as the USA just keeps growing and producing so the risks are low.
NZ? Not so much. Overseas lenders will not be buying the our debt (both public and private) that we export to maintain our lifestyles unless their risks are well covered.
That means they'll demand higher interest on the debt to cover default and currency losses.
The days of cheap debt in NZ won't return for quite some time. Even dropping the OCR to zero will have no effect as overseas lender won't take the risk. That leaves just one option if you believe cheap debt will resolve an economy's structural issues ... money printing. And we all know how that ends.
NZ? Not so much. Overseas lenders will not be buying the our debt (both public and private) that we export to maintain our lifestyles unless their risks are well covered.
In the medium term, we're a fairly low risk.
We'll borrow till we're totally broke.
We are already broke! Our wealth only exists on paper!
The lower the NZ$ goes, the more attractive Australia becomes. Not only will you get even higher wages, but you'll be able to afford to buy an iphone. You all will be stuck with ageing Air NZ planes falling out of the sky and ancient Cook Strait ferries crashing on rocks.
Good argument, but I will counter
iphones will always be expensive, here there and everywhere.
AirNZ are purchasing new planes. (It is Qantas which had to divert recently, and that was due to birdstrike)
Cook Ferry went aground due to the "captain" going off for a cup of coffee or goodness knows what!
Australia has always been attractive. People will always earn more money there . People come to Australia even from the UK to earn more money and have a better lifestyle.
AirNZ hedge their currencies. they will have a huge amount of US$ stashed in a US bank somewhere (is that safe?) to cover currency risks. Should be too much of a problem.
Lol, I have pondered that route. The challenge is that we can't produce the things we need for the transition we need to make in terms of energy, infra, etc. So, I would go for a 10 - 20 year plan that continues to use offshore ownership of NZ Govt Bonds to balance out our current account deficit (and hold our currency up) while we transition to energy and food sovereignty, and balanced trade. If we get the transition right, there will be no shortage of companies wanting to move here (I'd also minimise corporate tax).
So you want us to parallel Ireland.
Indeed, they've one of the world's highest GDP per Capita figures on earth, but the average Irish national has seen 2/5ths of not much through that process.
To do that, they'd have to have higher corporate taxes.....
Ireland prove the lie of GDP as a measure of economic output....I dont think JFoe is advocating an expansion of financialisation somehow (Im sure he will clarify) but rather a greater level of autarky
Ireland has an 8bn euro budget surplus and that's expected to increase. Sounds ok to me.
I recall a lot of govt fighting last year because they didn't know what to do with it. A problem NZ can only dream of.
Aside from that, Ireland is close to the EU, the only English speaking country in the EU and has a highly educated workforce so it's not solely because of their tax rate that large companies move there. I don't think it's possible to NZ to mirror that.
Ireland has an 8bn euro budget surplus and that's expected to increase. Sounds ok to me
Wages haven't risen in line with the GDP jump (it's actually worsened income disparity), they have a fairly under resourced public sector, and despite having measures like DVIs, they still have a housing and cost of living crisis.
Money rinsing is not an industry that benefits wider society.
No, I think should just target our tax on rent and, very progressively, on income. Tax the dividends to drive investment back into companies.
Is NZ in the same position?
There’s no way that the United States or Europe can somehow rebuild their industry without de-financializing their economy, without getting rid of the whole debt overhead and without raising the wages and the living standards of labor.
And the one thing that holds America and Europe together is their class war against labor. And they’d rather fight than have— this for them would be a civilization shock. So the West has had it. I mean, this is it. And it doesn’t even have a plan B. It only has plan A. Link
"So, I would go for a 10 - 20 year plan that continues to use offshore ownership of NZ Govt Bonds to balance out our current account deficit (and hold our currency up) while we transition to energy and food sovereignty, and balanced trade."
In the past 30 years, have you seen any government in NZ with a 10-20 year plan that isn't immediately reversed by the next one ? No? Me neither.
Every election Kiwis have their hands out for stuff. So every government continues to offshore ownership of NZ Govt Bonds (and quite a bit of private debt.) The last election was a classic example of exactly that.
Nothing will change until it all comes crashing down.
(The giant blood sucking vampire squid's pillaging team has us on their radar. The credit rating agencies are reviewing their current settings.)
In the past 30 years, have you seen any government in NZ with a 10-20 year plan that isn't immediately reversed by the next one ? No? Me neither.
True. But that's why we are falling by the wayside.
Good to see all of 'Bidenomics will create hyperinflation' economists licking their wounds. High rates in the US are suppressing the real estate market, but with existing mortgagors unaffected, and Govt crediting the private sector with hundreds of billions of dollars, the economy is powering on and the increased productive capacity means inflation is evaporating.
The US could of course use targeted taxation to pull more of the money they are spending out of the economy - focusing on taxing the hell out of the rentier class and oligopolies. Then they'd get the twin-benefits of low unemployment and reducing inequality. There are people in the White House who are pushing for this, which is why the rentier billionaries in silicon valley are getting in behind Trump.
It defies belief that Trump is the favourite. Economy going comparatively great in the US, it should be a landslide for the Dems.
They are so insular that they don’t realise the rest of the world are struggling and they are doing spectacular well. Or maybe they attribute that to Trump’s policies 4 years ago, which might be fair I guess.
It's the Dukes Of MAGA.
Thanks Profile! Hilarious!
lol, thats gold.
US government still taking on awesome debt levels. So it's the party before the disaster.
Why? The US hasn't run a budget surplus since 2001, what chain of events could lead to a 'disaster'?
It further defies belief that 'republicans' support Trump's tariffs on just about everything imported. Such nonsense will drive up the cost of just about everything consumed in 'Merica.
Biden not only kept the Trump tariffs in place, he increased them. So I think both sides are in agreement on that.
Biden actually implemented them properly too Trumps administration was hopeless, rule by tweat and constant firings. The chinese just bypassed Trumps trariffs.
Don't be fooled by the hysteria and social media 'noise'. Its mostly about the uncommitted non political voter. Give it a few months and Trump will be toast. The unstable genius will be naked.
Hope you’re right!
I'd hold all bets until Harris publicly opens her mouth. At this point, no one has any clue what her policies might be. From what I've heard she's Left of Bernie Sanders, and is another Californian full socialist whack job. At which point, those Democrat backers might realise what a terrible mistake they've made.
"From what I've heard she's Left of Bernie Sanders, and is another Californian full socialist whack job." From what I've seen she is a prosecutor, and apparently an effective one (probably why she's disliked), and seems to have an understanding of the impacts of socioeconomic policies that favour the wealthy. That's not socialism, it's democracy.
The extremist "you're either a 'Republican' or a 'Socialist whack job' name calling is what Trump does. It breeds division and hate. I think we should try to refrain from it until you have some basis for critical analysis and then explain your view.
You are so out of touch I can only presume your only source of US news is from the Fox Channel . You provincials are better off worrying about your own lousy economy and sucking up to the Chinese some more .
She supports higher taxes, so that it can be distributed to Black households. Race based taxes. Even Jacinda Ardern didnt go that far. And she proposed an UBI for 80 million people. She supports reparations for slavery. Regulating rents. Basically just take the California position and apply it to the whole country.
Can you please provide evidence that ‘she supports higher taxes so that it can be distributed to Black households’.
Did she explicitly mention race or was it rather redistribution to poorer people? (Many of whom happen to be Black)
Where do you get the idea that Trump is the favourite?
https://projects.fivethirtyeight.com/2024-election-forecast/#:~:text=Ho…
https://projects.fivethirtyeight.com/polls/president-general/2024/
Past time to eliminate overhead costs of rent extraction from national GDP accounting.
Whereas formal economic models explicitly state their assumptions (whether realistic or not), national accounting frameworks feature various implicit boundaries, which are not shown along with the data but are rather buried in technical notes on ‘methodology’. For example, the interest- based financial services mentioned above were originally considered mere transfers and thus outside the production boundary before 1968 (Christophers 2011). The 1968 System of National Accounts (1968 SNA) moved the production boundary by representing these services as inputs to an imaginary sector (thus making the assumption that they were ‘implicitly’ productive), whereas the 1993 SNA moved it further by considering such services to be the final consumption of households (and thus explicitly productive). The 2008 SNA went even further by stipulating that even the lending of banks’ own funds was a productive activity (dropping the pretense of ‘intermediation’ between savers and borrowers originally used to portray banking as a productive activity). In each of these cases the assumption of the level of productiveness of interest-based financial services was not explicit in the data, but rather implicit in the location of the boundary. Similarly, R&D expenditures by firms, governments and non-profit organizations were previously assumed to be intermediate inputs (or costs) of these entities, and thus deducted from GDP, but have been reclassified by SNA 2008 as investments in fixed assets, and are thus now counted in GDP. This adjustment added around $560 billion to US GDP in 2013 (when the country adopted SNA 2008) - more than Sweden’s entire output that year - and conveniently reinforced “America’s status as the world’s largest economy and [opened] up a bit more breathing space over fast-closing China” (EIU 2013). Different boundaries in the national accounts are thus based on different assumptions and lead to different results, but less explicitly than formal economic models. This contrast with explicit models is thus the second reason why MMT had not yet affected national accounting. Most economists do not even learn the details of national accounting in their professional training, and the measurement (or rather construction) of macroeconomic aggregates such as GDP is outsourced to official statisticians. It is simply not considered part of the conversation, neither in mainstream nor in heterodox circles. Link
The National Accounts and GDP are a joke - incredible that we are guided by the data they spit out. For example, about one-sixth of our 'labour productivity' is thanks to the surplus generated by our real estate sector, which is, in turn, made up of real estate profits and an estimate of the rent that owners would pay if they had to rent their own house!
What???
yep, one of the reasons that we have a lot of graphs with this shape... our whole economy was built on expanding private debt to the max from 1990 to 2009.
100% correct and that is why nobody really felt our rockstar economy! Just keep on selling houses to eachother at continuous higher prices gives New Zealand is the main driver for the increase of GDP. Has nothing to do with productive output.
"The Kiwi dollar starts today weaker... a -3.4% devaluation since the start of the month. TWI-5 ...is near a two-year low."
Cool!
Best we slash interest rates, right now, so we can help New Zealanders borrow more to pay for the increasing price for all those goods we import. And of course to enable all that new Debt we'll need the collateral underpinning it to rise to allow that. (and the worst of this madness is yet to come).
At least we have a competent Finance Minister plotting a course into the Hurricane ahead..
Lol - yeah. Top team this lot.
You mean it was better under Labour, as they spent billions on boondoggles and ensured we're permanently dependent on coal and oil from offshore?
Ah it's National that cancelled the national battery project to ensure we are permanently dependent on imported coal and oil.
Watch how they turn the Taranaki Basin into a mining dump....for a few trinkets
Edit-too slow to comment and point already made
bw: "Best we slash interest rates, right now, so we can help New Zealanders borrow more to pay for the increasing price for all those goods we import. "
If you think about what you just wrote, and play that scenario over and over again, surely you can see it becomes a doom loop where the NZD just tracks lower and lower and lower regardless?
It's probably better over the longer term to let the NZD go down. Imports will cost more - so we'll immediately consume less of the discretionary stuff but the essential stuff, while we learn to consume less (and seek alternatives!), will result in temporarily inflation. Meanwhile, exporters will get better prices and trade balance might be returned ... which means we can stop exporting government and private debt to make up the shortfall ... And stop paying huge sums of interest to lenders from overseas.
Imports will cost more - so we'll immediately consume less of the discretionary stuff but the essential stuff, while we learn to consume less (and seek alternatives!)
Refer to our balance of trade, this hasn't happened for the past 40 years.
So it takes a lot of hopium to think it'll be any different next time round.
And what's happened to the NZD over that same period?
With each tick down the NZD makes, it gets harder and harder to borrow to make up the shortfall. And the cycle accelerates.
So it takes a lot of hopium to think it'll be won't be different next time round. And the next time. And the next time. Each time will get a little worse.
It's raised and fallen several times and averaged about 57 cents to the USD.
It really doesn't look like it's impeded our ability to take on debt.
You're right though, each time we go through an interest rate lowering cycle, things get worse.
"It's raised and fallen several times and averaged about 57 cents to the USD."
1. You can not quote an average when discussing a trend. That makes no mathematical sense.
2. You can not pick just one currency to compare the NZD too - even if it is the USD. The USD bounces around all on it's own against other currencies too.
When a sovereign currency starts tracking lower - and nothing is done - the slide slowly gains speed. As the rate of decline accelerates investors start getting nervous and it speeds up. NZ simply doesn't have the financial firepower to do anything about it.
Further, we have no globally significant products or assets, nor are we in a strategic location, so we'd have few 'friends' to bail us out but we have many 'friends' happy to pick up the pieces when we hit rock bottom.
1. You can not quote an average when discussing a trend. That makes no mathematical sense.
1986: 47 cents
1989: 72 cents
1993: 51 cents
1997: 71 cents
2001: 40 cents
2004: 67 cents
2008: 50 cents
2012: 85 cents
And then we've averaged 65 cents since then. What's the trend bro
2. You can not pick just one currency to compare the NZD too - even if it is the USD.
You can if it's the currency most of our trade is settled in.
Sounds like you've cracked the RBNZ's strategy
If the NZ$ goes down there won't be anyone left in the country - every one who can will have moved to Australia. And good luck trying to find doctors and nurses willing to come to NZ to work for pesos.
Yes, that is the plan but he have to weather the recession which comes with it.
Yeah - agree. What makes me laugh is when people suggest we would just buy 'domestic' alternatives rather than import. Do they have any idea what we import? Here are out Top 10 Imports by Product Category. You can't just whip these industries up domestically overnight. Even more so now that we seem to have abandoned our gas and refining industries.
Petroleum and products
Mechanical machinery and equipment
Vehicles, parts, and accessories
Electrical machinery and equipment
Textiles and textile articles
Optical, medical, and measuring equipment
Plastic and plastic articles
Pharmaceutical products
Iron and steel, and articles
NZ cant even afford to buy pharmaceutical drugs that even third world countries have available. Let alone planes and ferries. But then again, that's the plan right? The faster that non-Maori get sick and die, the quicker "equality of outcomes" is achieved.
Within a national resilience plan to rebuild NZ's manufacturing capability and capacity I would suggest there is scope for NZ to manufacture it's own machinery and plant, electrical machinery and parts Textiles etc, Optical, Medical equipment (FPH?), Plastics and plastic things, pharmaceuticals, metals. Indeed in many areas we already do do that in part, so it really just means there is scope to grow the capability here.
To grow NZ's manufacturing capability and capacity requires a longer term competitive advantage. Where would that come from when we import so much energy that would be required to support such growth? Were NZ going hell for leather building up our supply of renewable energy we may have a chance. Without it? Nope. Just small scale niche stuff - nickels-and-dimes. Add to that the 'tyranny of distance' and whatever it is we manufacture must be small and lightweight. There are things we could 'manufacture' that fit this mold. They result in royalty, license, etc. income. (Alas Kiwis don't like the tall poppies that do such things so there few that stay in NZ.)
"....requires a longer term competitive advantage" and that is achieved through suffering the short term higher costs to establish the capacity. Should have started yesterday, shouldn't put off until tomorrow. This is about becoming less reliant on imports. Reallocating national resources to support industry growth rather than importing something we can build or create ourselves. Do it well and we can develop an export industry. Yes there is a "tyranny of distance" but that's from Europe. Australia and Asia aren't that far away.
Agreed. We need to refocus.
There's a reason why I, Jfoe and others harp on about renewables investments ... It is a double winner in that it reduces imports and facilitates increases the cheap energy that all industry in NZ needs to grow. (Yes solar and wind are now cheaper than just about all else. Hydro is probably cheaper but environmentalists add in massive - but vague - environmental costs. Ditto tidal.)
Can you see any political party in NZ have this focus? No? Me neither.
To see the same focus you have to go back to the 40s and 50s when NZ built massive dams and provided (until National privatized them) the cheapest electricity anywhere in the developed world.
Mate you are dreaming - but I have a quality Hillman Hunter and a lousy PYE TV that you can buy if you want
Ok so why would I invest in a manufacturing business in NZ unless there is a competitive advantage to do so. Much better if I shift my funds offshore and invest in countries with a bigger (much bigger) base
You're thinking too shallow. I'm advocating for a government supported program to develop the base. You picked a car and a TV, why those? what about white wear or health products or steel and aluminium? Oh right - we already do those here don't we? Doh!
The -3.4% deval is because of the dovish commentary about rate cuts this year. Markets are forward looking, reactionary moves happen when something unexpected happens. Time for you to hit the Econ books. In all liklihood anything less than 75 basis point drop before EOY will put our dollar higher and a 25 bp cut in Aug wont move the FX needle at all.
Surely 364m is the total US population, not its workforce. Workforce is more like 160 something million??
gulp! you are right of course. Fixed now.
Thank you.
More coffee, David. (Love your work.)
Meanwhile, US initial jobless claims fell more than expected last week at 225,000 from the 281,000 of the prior week. These levels are nearly back to where they were a year ago. There are now 1.9 mln workers on these benefits, a tiny slice of their 364 mln workforce.
Their workforce is larger than their population?
The United States had an official estimated resident population of 334,914,895 on July 1, 2023, according to the U.S. Census Bureau.
Edit: i see Antz beat me to it. The latest official estimate is civilian workforce size is 168mln. https://fred.stlouisfed.org/series/CLF16OV
(From Oz this morning). If just one of these goes through, what do we think will happen to all the rest? And what would our sparkies do, apart from get on the next plane to Sydney?
"Five months of industrial action by workers... has delayed the construction of 1600 homes and a slew of warehouses .... adding millions of dollars in extra costs. As part of an ambitious push for a 24 per cent pay rise (workers) have refused to show up at appointments.."
https://www.afr.com/work-and-careers/workplace/pay-dispute-delays-const…
People can't handle price increases over there as they are used to being so flush with disposable income for so long. Millennials and GenZ have never experienced any significant drop in living standards or economic shocks in Oz so they will be outraged and demanding. Who will budge, the employers or the workers, place your bets now.
"As part of an ambitious push for a 24 per cent pay rise, about 750 Electrical Trades Union (ETU) members at the distribution company, part-owned by the NSW government, have refused to show up at appointments to switch off powerlines on construction sites since February."
"Endeavour Energy has offered the workers – who earn an average $150,000 a year including overtime, superannuation and allowances – 11.5 per cent over three years, made up of 5.25 per cent, 3.25 per cent and 3 per cent increases.
However, the ETU wants 8 per cent a year on top of other claims, including an increase in workers’ 16.5 per cent superannuation, a second union picnic day, and higher pay for working when it rains or is hot.
Endeavour has said the cost of the union’s wage claims would ultimately have to be paid by 1.2 million electricity customers."
Std Oz Union standover tactics for industrial blackmail.
Would Albo use this as a reason to smash the unions for the good of the country and not just his patron supporters. He is too chicken I suppose
"Renewable energy promise side-tracked by fast-track work"
https://newsroom.co.nz/2024/07/25/renewable-energy-promise-side-tracked…
Another election pledge fail...the list is getting very long and its only been 8 months?
Cynical me would think they are going to give the greenies a choice , renewables fast if they let other fast tracks through.
More cheap electricity => less energy (fossil fuel) imported => improving trade balance (and reduced energy shock impacts with the inevitable inflationary outcomes) => Less debt created and exported => less interest paid (and 'reverse' exported).
Yep. Such an obvious long term benefit even if only considered in economic terms.
... long term...
And that's why it won't be done, short term political cycles drive short term decision making.
Electric Kiwi not taking any new customers or they make losses on them:
I used to be a customer of theirs, and they were very genuine in their communications with customers in explaining the flaws in the market. I hope they manage to stay afloat and keep pushing to split the gentailers into retail and generation. More competition = better prices, less gouging on high spot prices, more incentive to invest into additional generation.
Unfortunately it won't happen as long as the government is the major shareholder. They won't bite the hand who is feeding them!
The US economy picked up speed?
Goldbugs will be hating that.
How about Bitcoin bugs Wingman ..will they be hating that?
US creates more money (debt). Bitcoin supply remains limited.
Hmmm ... I can't see the bugs worried about that at all. ;-)
Bitcoin's funny money no one uses...goldbugs call gold 'money', but it isn't, it's a chunk of useless metal with no dividend.
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