Here's our summary of key international events from overnight that affect New Zealand, with news the US Federal Reserve has cut its equivalent of the Official Cash Rate.
The Federal Open Market Committee has lowered the target range for the federal funds rate by 25 basis points to between 1.5% to 1.75%.
"This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain. The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate," the FOMC says.
A change in the FOMC policy statement’s language, removing “act as appropriate”, signaled the Fed may leave rates unchanged for some time, Bloomberg reports. US stocks fluctuated and Treasuries rose with the greenback after the Fed move. The S&P 500 was little changed near an all-time high, with the 10-year Treasury yield holding at 1.8% and the two-year rate at 1.63%.
The New Zealand dollar was recently at US63.50 cents, slightly lower than US63.6c last night. It's also a little lower against the Aussie dollar at A92.45c, and the euro at 57.14c.
Elsewhere in the US President Donald Trump’s demand that China commit to big purchases of US farm products has become a major sticking point in talks to end the trade war between the two countries, Reuters reports.
Trump wants China to buy up to US$50 billion of US farm products, more than double the annual amount it bought before the trade war started. However according to Reuters, Chinese agricultural buyers represent both state and private enterprise and generally import from the cheapest source. Thus the demand for China to commit to buying a huge volume of products, regardless of whether they were economical or in demand, would require state intervention for China to implement. This contradicts a key demand the US is making of China which has been a US policy goal for decades: China must become a more market-based economy and stop subsidising state companies and favouring local firms at the expense of foreign competitors.
Nonetheless Reuters also reports that the Trump administration still expects to sign an initial trade agreement with China next month despite the cancellation of the APEC summit in Chile where officials had hoped to finalise a deal.
Also on trade Bloomberg reports India keeps making last-minute requests after it agreed to terms for the world’s largest regional trade agreement, the Regional Comprehensive Economic Partnership (RCEP). This will potentially prevent leaders from 16 countries including New Zealand from announcing a breakthrough next week during a summit in Bangkok hosted by the Association of Southeast Asian Nations.
Chile’s biggest social unrest in a generation forced its government to cancel next month’s APEC summit in Santiago. Another casualty is the United Nations climate change conference, known as COP25, which had been scheduled for December in Santiago. Chile's President Sebastian Pinera said: “We understand perfectly the importance of APEC and COP for Chile and the world, but we have based our decision on common sense. A president needs to put its people above everything else.”
There have been nearly two weeks of rioting and protests in Chile that have seen thousands of arrests and left at least 20 people dead. Chile’s protests began in mid-October as a student-led fight against a 3.7% hike in metro fares, but demonstrations quickly grew with inequality, the cost of living and police repression also targets of the protestors. Here The Guardian looks at at protests raging around the world in the likes of Hong Kong, Lebanon, Chile, Catalonia and Iraq suggesting widening gulfs between the haves and have-nots are radicalising many young people.
Meanwhile the US Commerce Department said gross domestic product increased at a 1.9% annualised rate in the third quarter, with businesses maintaining a steady pace of inventory accumulation, exports rose and the housing market rebounded after contracting for six straight quarters. The US economy grew at a 2.0% pace in the April-June period versus economists' expectations for a 1.6% growth rate.
In China more than 400 mostly small property developers have filed for bankruptcy so far this year against a backdrop of tightening government scrutiny, slowing house sales and a liquidity crunch. As of October 27, 408 property developers had declared bankruptcy so far in 2019, according to China's People’s Court.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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19 Comments
The nightmare returns
https://latest-today-news.com/2019/10/28/in-stunning-loss-for-merkel-cd…
Asked a friend what is going on he said, "What we are seeing in Germany is a reaction to that stupid womans decision to have unrestricted immigration .
He went on to say, "This combined with the second stage reaction of the old communist states makes fiscal/political union impossible ."
Merhkel saw it coming.
Attempts to build a multicultural society in Germany have "utterly failed", Chancellor Angela Merkel says.
She said the so-called "multikulti" concept - where people would "live side-by-side" happily - did not work, and immigrants needed to do more to integrate - including learning German.
" What we need is a great big melting pot ..
.. big enough to take the world and all it's got...
Keep it stirring for a hundred years or more....
.. turn out coffee coloured people by the score ! "
..
In theory , that should work fine ... in reality , the Germans aren't as fond of an expresso as Angela Merkel thought...
. . the theory of multiculturalism doesn't seem work as smoothly as our leaders would believe ... in all fairness to the Germans , Angela did allow 800 000 Syrians to immigrate in one year ... which is a flood of culturally different folks ... ( the lyrics are Blue Mink's " Melting Pot " )
He's talking about human psychology Frazz. The unfortunate truth is that despite the religious based argument for tolerance of differences, we have learned over the centuries to fear difference. While we can postulate on the origins, fundamentally it is a basic form of tribalism. The old English adage of 'When in Rome, do as the Romans do' doesn't seem to be respected these days. I do not know if other cultures have similar sayings, but it basically is about respecting other societies and ways of life. It is clear that there are other cultures who plainly have no such respect. We have plenty of evidence here in NZ of immigrants who do not respect it, and fully expect to live here in their own culture, with minimal assimilation, with the utter lack of understanding that NZ is the 'safe' place it is, is because we have no tolerance for the unsavoury aspects of their cultures.
Not too long ago the media reported on the visit of a visiting minister of a foreign, middle eastern government, who during his visit attended a mosque in Auckland and preached an anti-Israel sermon, apparently exhorting Muslims in NZ into anti-Jewish action. Our societal reaction was less than a whimper to such offensive talk. Indeed I remember someone complaining that the sermon was not for public consumption, which makes it even more concerning.
No.no, no,% of immigrants in Germany is 14.8 , over 12million people, thats in 2017.
I'm not seeing the racism. Is it because he mentioned skin colour? But you did also. He may well have a history of racist posts but this isn't one of them.
Not that it matters because in a few generations white people won't exist. They are below replacement birth rates, and from my experience white girls prefer coffee coloured boys too.
.. apparently , blue eyes will disappear too ... as the gene involved is recessive ... the gradual " melting potting " of humanity will lead to olive complexion dominating , and brown eyes ... Angela Merkels mistake was to import too many Syrian refugees too quickly for a smooth assimilation into German society ... typical left ideologue ...
West has had 50 years of relative tolerance and openness since advent of birth control, pervasive welfare, reduced domestic workloads and more recently growth of desk jobs freed women from oppressive patriarchal control. Our secular belief systems have converted most, with religion dying out in face of freedom and permissiveness offered. We could afford to be magnanimous and tolerant to other belief systems as we were winning converts over the long term. But fundamentalist religions like Mormons, Amish, Islam are growing rapidly in the west. Their high birth-rates and cloistering their children to prevent apostasy are proving stronger than the pull of freedom. I don't think it matters given how fast tech is changing (AI and revolutions in medicine in next few decades), but it could be a civilisationally destructive problem if it continued for 100+ years towards a likely Theocratic endpoint.
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