Here's my summary of the key news overnight in 90 seconds at 9 am, including news global growth forecasts have been scaled back - again.
Following on from yesterday's downward revisions by the World Bank, overnight the [euro-centric] IMF cut its forecast for world growth, warning that stagnation in Europe, a slowdown in large emerging markets and heightened political tensions in Russia and the Middle East threatened an increasingly fragile global economy.
The US is noted as an exception with their growth forecast revised sharply higher, and also New Zealand gets a mention by being in the group of "Other Advanced Economies" who together have growth forecasts even above the US. New Zealand is also mentioned in the group of countries where housing markets have 'rebounded'.
The separation of the US was emphasised in new data about their labour markets. Job openings climbed to a 13-year high in August as employers gained confidence about the outlook for demand.
In Australia, the RBA kept its rates on hold late yesterday, and despite trade and commodity price woes, their construction industry is actually booming, led by new residential construction. Construction growth across the ditch is actually at a nine year high.
Here's an item to get you wide awake this morning. In China, a major insurance company there - Ping An Insurance who is one of China’s biggest financial firms - is offering to lend money to home buyers for down payments, part of a trend that could help their housing market - but the move will substantially raise the risks of the Chinese financial system.
In Europe, a second day of grim German data and the cut in IMF growth forecasts spooked European assets overnight, as the recent spell of global financial market volatility continued.
That pall also enveloped Wall Street with stocks lower in late trade and a sharp fall in Treasury yields. In New York, UST 10 yr yields have fallen to 2.39%.
And the oil price is now under US$90/barrel with the Brent price just above US$92/barrel. Gold is basically unchanged today at US$1,208/oz.
We start today with our currency level a little higher against the US dollar than it was at this time yesterday. The NZD is at 78.3 USc, is at 88.9AUc, and the TWI is at 76.2.
If you want to catch up with all the changes on Tuesday 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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20 Comments
Well, you can build new in Aus for 350k, in NZ it's illegal to build for less than 550k!
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=113…
Here is an interesting little bit of information I came across recently regarding Spark. Auckland University Business School have a program they have been operating for years called Spark but didn't protect the name in any way. Lol. Telecom just came along and stole it, which is interesting because I thought trademarks were automatic if it could be demonstrated they are in active use in the public domain already.
Be interesting to know more, perhaps someone at Interest.co could look into that one.
The Daily Mail reports UK's first libor conviction - guilty plea, all suppressed.
http://www.dailymail.co.uk/news/article-2783467/Senior-banker-UK-convic…
Oil price is interesting - watch now as the oscillations in price get larger and more frequent, the US frackers be in synch with OPEC with the expected fall off in fracking oil production underpinnig the upward price and short term gluts driving it down into eneconomic production territory - Anyone who thought oil was simply going to trend up or down is in for an education
Oil price is trending down, by itself hard to judge just what is going on. Is it a glut of supply? or lack of demand? or both?
If however you look at the price drops in commodities and the BDI then it doesnt suggest much if any global economic growth, in fact the reverse.
$88 is an amazing and worrying price, if the marginal cost of new oil really is $90+ look for cancelled projects.
regards
Seems coffee might get more expensive as well....bugger
http://grist.org/list/your-coffee-is-about-to-get-a-lot-more-expensive/
Seems its the repetitive droughts, who would have known...
Yes, I read those reports too. But check out the IMF charts for Arabica and Robusta beans. They are going up, but the charts put it in perspective. No need to choke yet.
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