Here's my summary of the key news overnight in 90 seconds at 9 am, including news of weakening Chinese trade.
But first, it seems the latest FOMC minutes released a few minutes ago are dampening speculation of seeing the first taper at the September meeting.
Many Federal Reserve officials want to see more signs employment is picking up before they’ll begin slowing the pace of its monthly bond purchases.
Minutes from the June meeting show about half of Fed officials believe the central bank should end its US$85 billion-a-month bond-buying program by the end of this year. But don't forget many of the more hawkish FOMC members aren't voting members. Bernanke is due to speak about now.
The release of these minutes caused a flurry in stock markets and in exchange markets, but they quickly settled down.
Of more lasting importance, inventories at US wholesalers unexpectedly declined in May by the most since September 2011 as sales surged, pointing to a pickup in orders and production. But declining stocks dampens the GDP growth calculations before the following pickups, so some see the upcoming Q2 GDP result will be softer than previously expected.
US oil inventories are down on rising consumption, and the international oil price up, now over US$106 / barrel.
Rising yields on US Treasuries may bring a deficit reduction option for the US government. Those rising yields are causing prices for those bonds to fall, so it has been proposed that the Federal Government buy them back at a discount, thereby reducing their liabilities and taking a 'gain' on them. Up to US$450 billion could be netted this way, it has been suggested.
In important data out overnight, China’s exports and imports unexpectedly fell in June, underscoring the severity of the slowdown in the world’s second-biggest economy as the new leadership reins in credit growth.
The NZ dollar starts today at 78.2 USc, 85.5 AUc, and the TWI is at 74.7.
No chart with that title exists.
12 Comments
...good luck to them but you and I and everyone else knows that it is an impossible task. Maybe they need to accept that the internet has made GST an avoidable tax...time to re think it's usefulness. Sensible thing would be to move from GST to aland or asset tax... itmight sort out land bankers at the same time.
With the major suggestion being "get the banks to clip the ticket" it would actually be easier to implement a broad Tobin Tax than to (effectively) implement a Tobin Tax only on those buying imports.
As the idea of the Tobin Tax is anethema to this government, there is absolutely no way they are going to put the machinary for one into place.
Great article from Brian Fallow today; "The public pressure Prime Minister John Key is putting on the Reserve Bank to devise some kind of carve-out for first home buyers from forthcoming restrictions on low-deposit mortgage lending is politics at its most tawdry."
- http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=108…
So what else is new ?? The Feds were NEVER going to reduce QE much less stop it....Bernanke is backpedalling as fast as possible to reverse the "wrong perception" of his speech. This is Q Eternity....and will continue ala Japan and maybe do their own "Kuroda" "double or nothing" gamble if the markets and economy continue to tank.
Right now the world economy is on "All Engines Failure"....Taper ??? Yeah Right !!!
No end insight is right Kin...they will of course change the term from QE to something like "printing for America"...and the stupid will fail to see that nothing has changed. There is no escape from the hole the Fed has dived into...no escape without a slaughter of the markets and the economies.
So we can expect the local property economy to expand like all other bubbles...you average shack is set to cost one million dollars in the not too distant future.
but nothing is as it seems:
European multinational gazumps Synlait IPOhttp://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=108…
Addition of new cornerstone shareholder leaves NZ investors high and dry.
A large European dairy cooperative has gazumped the Synlait Milk capital raising to emerge with a strategic stake in the Canterbury-based processor before its sharemarket listing on July 23, sources say.
However, fund managers were left scratching their heads about why the stock was priced so low, given the offer was said to be four to five times oversubscribed.
Private client advisers reported getting just 20 per cent of the stock they had bid for.....
- may explain why less insider shares being sold as reported in transaction documents.
Q: what does NZX.com think, heresay volume demand for script, pricing at lower half of expectations?
This nonsense also needs to be terminated - the costs of self induced volatility are destroying much needed capital.
Bernanke on collateral shortage: "There may be some pressure on the supply of safe assets"
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