Here's my summary of the key news overnight in 90 seconds at 9 am, including news markets have a sense of turning points in both Europe and China - turning down that is.
Overnight, gold has turned sharply higher reaching US$1,318/oz after the US dollar fell and the markets absorbed the last Fed statement. The equity markets took a breather.
But on the ground, the number of Americans filing new claims for jobless benefits fell last week and factory activity in the mid-Atlantic region accelerated in June, more evidence the US economy was strengthening.
Argentina said this morning that it isn't going to New York to negotiate with holdout bondholders, casting doubt over whether it will seek a deal to stave off a debt default.
On the other hand, the holdouts said they would negotiate.
In Europe, the IMF has warned that the economic recovery is not strong enough there and the ECB should be planning quantitative easing.
In a move that should have implications here, the Australian government announced it will explicitly ban commissions for the sale of financial products and give itself new powers to dismantle incentives it decides are against consumers’ interests. At the same time it is removing much of the bureaucratic 'protection' framework built up over many years. In the end, these changes will probably make it easier for banks to push financial products on to their customers in Australia.
Yesterday, Rio Tinto again cut the price of its iron ore as sales into China slump and this was not its first discounting. It followed other iron ore miners. The extent of the slowdown in China may be more than authorities realise as the effect spreads out from the core steel industry, driven by their housing slowdown.
Back in the US, yields on the benchmark UST 10yr bond fell today and are now at 2.60% this morning. The price of both US and Brent oil continues its steady rise, with the Brent price pushing up through US$114 for the first time in 2014. The lower American prices gives them a distinct economic advantage.
We start today with the NZ dollar holding on to yesterday's rises. We are still at 87.1 USc, 92.7 AUc and the TWI is at 81.0.
If you want to catch up with all the changes from 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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6 Comments
Iraq summary:
http://oilprice.com/Energy/Energy-General/Iraq-Why-its-worse-than-you-t…
''The second great call on new oil production is that currently producing oil fields across the globe produce less and less oil every month. All in, these fields decline in production at 6% per year, which means that the world will require an additional 40 million barrels of new production to just replace those declines by 2035. To put that in context, it means the world needs to bring on new oil production equal to four Saudi Arabia’s.
How important the IEA believes Iraq’s contribution towards meeting global oil demand needs to be is shocking. The Agency has earmarked Iraq to provide 45% of the global growth in oil production by 2035.'
Eggs. One. Basket.
hahahaha...
Iraq might get to 12 if you believe the hype, breaking 6 looks a big ask, even 4.
Even if Iraq does 12 that still leaves 36 to go....lets say pigs might fly USA tight oil manages 12....to 2030, we are still 50% off.
If however you look at what the IEA etc are saying they now expect "peak demand" circa 2020, so its not that we wont want all the oil they say we can get, its just that we wont or cant afford it.
The back peddling is looking furious, realistically I think we'll see big impacts by 2020. Glad I have a push bike and an electric train is all I can say.
regards
David,
http://www.reportingclimatescience.com/news-stories/article/nasa-076c-m…
"Data released today (17 June 2014) by US agency NASA shows that May's global temperature anomaly – the variance with the long term average - was 0.76oC. This compares with the previous warmest Mays in 2010 (0.70oC), 2012 (0.70oC) and in 1998 (0.68oC) - an El Nino year."
And yet in Nelson, we get letters to the editor like this (NelsonMail, 17 June 2014):
"...There has been no global warming for the last 18 years...The world is awash in hydrocarbon energy resources...Peak oil is centuries away... there has been no increase in extreme weather events...global warming is the biggest scientific scam in human history."
How can such idiocy exist? Or are they being paid by the Koch brothers to diseminate this blather?
I'm not really sure why the IMF thinks that QE for the Eruozone is a good idea.
It's not like it did the USA any favours....
Two weeks ago I said the heavily promoted Roy Morgan poll that showed National on 52.5% was a outlier poll and that the result could be explained by happening to get an oversampling of National voters instead of Green voters (since the Green vote also collapsed) in today's poll everything is back to normal.
The alternative explanation to two weeks ago being an outlier poll, that from 4 to 2 weeks ago the Green Party mysteriously lost 1/3 of its party support, then from 2 weeks ago to today it just as mysteriously gained it (and it was National benefiting from disgruntled Green voters).
But todays poll will get nowhere near the media attention I am sure.
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