Here's my summary of the key news overnight in 90 seconds at 9 am, including news of shrinking Aussie consumer confidence.
But first, the big news today is the 38 billion m3, US$400 billion deal China and Russia have signed for natural gas over 10 years. The price is much less than what Russia was reported to be seeking but it caps a 10 year negotiation and comes at a key time for Russia.
However, even though it is a huge long-term deal, it seems to be at a 30% discount to current market prices. China was also seeking equity stakes in the Gazprom gas fields but it is not sure how this aspect was agreed. Most of the gas will come from eastern Russian gas fields which don't have an easy alternate market.
In the US, and hard on the heels of the huge fine on Swiss bank Credit Suisse that investors and the bank essentially shrugged off as 'not material', US regulators are seeking a much stiffer penalty on BNP Paribas.
They now want more than $5 billion in fines and a guilty plea to criminal charges for violating US sanctions from the French-based bank. In addition, a temporary ban on transferring money into and out of the US is also being considered. A penalty like that might actually hurt.
In Australia, two separate surveys of consumer confidence out yesterday have been pessimistic. The ANZ-Roy Morgan survey reported a big drop, and the Westpac-MI survey had a similar reading. The next consumer confidence survey for New Zealand is out later today.
Yields on benchmark UST 10 yr bonds rose to 2.54% in trade today. The oil price rose especially in the US while the gold price fell. Equities had recovered most of yesterday's decline by late afternoon trading.
On the exchange rate, we start today with the NZ dollar lower at 85.5 USc, at 92.8 AUc and the TWI is now at 79.8.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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Some bad news for the 'shale' tight oil industry.
U.S. officials cut estimate of recoverable Monterey Shale oil by 96%
"Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California’s vast Monterey Shale deposits, deflating its potential as a national “black gold mine” of petroleum.
Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said."
This is quite remarkable seeing as the Monterey Shale was thought to comprise ~2/3rds of USA's total shale oil reserves according to an EIA report released in July 2013. At the time the EIA estimated the Monterey shale contained 15.5 billion barrels of oil. Interestingly the Post Carbon Institue published a report in December 2013 warning that the 'shale oil' cornucopians were grossly over-estimating the Monterey shale's reserves - Drilling California: A Reality Check on the Monterey Shale.
Where is profile?!
The great white hope for European shale, Poland, has also been a big disappointment:
http://www.bloomberg.com/news/2012-03-26/shale-boom-in-europe-fades-as-…
There is a pattern emerging here, for those that want to see it.....
Here's a sobering assessment of the US' ineptitude in foreign policy: caning Russia over the Ukraine has pushed it straight into the lukewarm embrace of its old neighbour - who just happens to need Lebensraum as well as energy....the Great Game of Thrones continues apace, and the poor ol' US and its Drone President is simply left clean out of the loop.
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