Here's my summary of the key issues from over the weekend that affect New Zealand, with news our currency powered higher against both the AUD and EUR on Saturday in New York currency markets, pushing the TWI-5 to over 80 again.
But first, with Greece rapidly running out of money and again teetering on the edge of default, Germany said Friday that the Greeks would receive a desperately needed financial aid payment only after creditors approved a package of reform measures that the Greek government has promised to send them soon.
In China, one key problem that has been identified by the OECD as the country's economy slows is a mismatch between people's education levels and the needs of an economy increasingly reliant on technology and innovation, the OECD said over the weekend. China will be a very big buyer of education services, it seems.
In Australia, their regulator has said that banks and other adviser networks "were abusing the system, which is designed to alert ASIC to systemic problems in the market". Four pillar bank NAB is in their sights at present, but the financial services regulator is now angry at the continuing revelation coming out from the bank adviser networks and their lack of integrity.
In New York, the UST 10yr yields held their level on Friday and are now at just 1.93%. Somewhat surprisingly on Friday in New Zealand, our local swap rates did not follow Wall Street - they rose about 2 bps across the curve.
The crude oil price rose marginally to US$46/barrel and Brent crude is at $55 a barrel. The US rig count fell again last week, but output continues to rise in the latest EIA data. Drilling productivity is rising fast.
The gold price also rose recovering part of its recent slump and is now at US$1,185/oz.
The New Zealand dollar starts today very much stronger against the greenback at 75.6 US¢ and up more than 1½¢, it is at 97.5 AU¢ a new record post-float high, and the TWI is at 80.4, which is the highest it has been on the TWI in more than two months. We also hit a new all-time post-float closing record high against the euro at 69.9 euro cents
If you want to catch up with all the local changes on Friday, we have an update here.
The easiest place to stay up with event risk is by following our Economic Calendar here »
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11 Comments
yes and no. note, rig counts down 30%. On top of that % jumps is quite possible but there are some kickers out there, a) drillers are apparantly concentrating more and more in the well known sweet spots, hence 5~10% productivity is expected, what we dont know is is this a n improvement in capability or because they are drilling in better areas almost certianly mostly the latter. Also what we dont know is are the leases costing more? if so what is the NET improvement. b) Once the sweet spots are exhausted the output will go bye bye. c) is that 5~10% gain just mean front loading? ie forcing a well to pump faster initially makes it collapse afster later on.
NB do you have a URL please so I can go look?
What is more interesting short term however is, http://oil-price.net/ The last few months is looking like a dead cat bounce and the common knowledge pointed to here, http://www.zerohedge.com/news/2015-03-21/perfect-storm-oil-hits-two-months-us-crude-production-soar-just-storage-runs-out suggesting a price collapse mid-year. the Junk bond market looks more and more junky every day.
On top of that, http://fractionalflow.com/2015/03/21/is-the-red-queen-outrunning-bakken… "The NDIC data show that the developments in productivity for the average well in Williams has remained more or less stagnant since 2009 with a trend towards lower well productivity in recent years." So I would appreciate seeing your source, thanks.
Interesting Spengler piece on the AIIB - a further move, in ZH's excitable prose, to the de-USD-ification of the world. But, then, the irrelevance of the US in foreign policy matters, especially to Asian eyes, is a given, now.
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