Here's my summary of the key news overnight in 90 seconds at 9 am, including news the Fonterra dairy auction has seen a large retracement in pricing.
Overall, prices are down 7.3% in US dollars, down 8.1% in NZ dollars, led by milk powders which fell 10% from the last auction. The fall snaps a run of nine straight auctions that were higher, and it is the largest decline since mid April 2012. Prices are now still very elevated however and this change only takes them back to where they were at the end of March.
The US Fed said they would push on with their US$85 bln per month bond buying program and said unemployment and inflation will determine whether they raise or lower that level. They also said fiscal austerity is making their job harder.
Oil, gold and the Dow fell following the Fed announcement.
Although American manufacturing expanded at its slowest pace this year, that has not stopped car makers having their best sales month in six years in April.
Growth in China's manufacturing sector also slowed in April as new export orders fell, raising fresh doubts about the strength of the economy after a disappointing first quarter. The official purchasing managers' index (PMI) fell to 50.6 in April from an 11-month high in March of 50.9. Analysts had expected the April PMI to be 51.0. The pull back on the official PMI mirrored a similar decline in a preliminary HSBC PMI last week, suggesting China's exports engine faces headwinds from the euro zone recession and sluggish growth in the United States.
British PMI data out overnight was better than expected, but manufacturing there is still contracting. However it was enough to lift the British currency.
In Australia, there are facing further budget woes, this time due to the sinking carbon price which is the basis of their ETS. They will have to find another A$3 bln in either savings or new taxes to plub that new hole.
Today, all eyes will be on the NZ unemployment data out at 10:45am (woops, its next week!), and overseas the focus shifts to the ECB and markets are expecting them to cut rates tomorrow.
The Kiwi dollar starts today sharply lower at 85.0 USc, 82.7 AUc, and our TWI is at 78.0.
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1 Comments
To add to the cheer:
The Economist (dead tree edition, 20 April 2013): ETS, RIP? Effectively, the EU's ETS lies on the gurney, at 5EU/tonne, with about one year's emissions worth of overissued allowances sloshing about, and a recession-induced lack of demand for new permits.
Ye'd haveta have a heart of stone not to lol....
And, still in the EU, the slanging match between France and Germany: one senses a certain schadenfreude at the Torygraph.....
And Still in the EU, Holland's circle around the bowl, quickens....
And with AAPL clonking along below 440 (as predicted by Reggie Middleton a coupla years ago), QE to infinity and beyond sure ain't gonna lift all boats.....
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