Here’s my summary of the key news overnight to keep you up-to-date over these holidays.
This is the time of the year when reviews of economic forecasts for the prior year are put under the spotlight. This year for the global economy virtually no-one got anything right, being either too gloomy or too positive. Malcolm Maiden has a useful review here,
Does the ‘wisdom of crowds’ mean anything? The latest US survey of consumer sentiment shows it rising. That is the third consecutive month of rising optimism in the US.
It is not evenly spread of course. Manufacturing in the oil patch is in the doldrums. But even there in sectors not related to oil, there is rising sentiment. Which just goes to show that low oil prices boost economies, diverting spending to ‘better’ areas – even in Texas.
There is currently a lot of ‘expert’ prediction that the US is headed “to recession“, but perhaps those folks should review their guesses for 2015.
Even Spain and Italy seem to be out of their funk.
Then there’s news that China is following New Zealand, moving away from Government-owned piublic housing and to a system of rent-subsidies of private tenancies. An Accommodation Supplement, if you like. It’s going to stop building rental housing units to accommodate migrant workers and people displaced by demolitions or renovations of urban residences or shantytowns. Instead, subsidies will be ramped up for those in need of rental housing, and people will be encouraged to find their own places from private owners.
You should also note that Brazil is staggering under the twin disadvantages of a stalling economy and a government under fire from its supporters who don’t want to see necessary reforms.
The week before Christmas is the usual home loan approval peak for the year in New Zealand and this year was no exception with the highest volume and value data being recorded then. This year that peak was +2.4% higher than the equivalent week in 2014 for volume, and +7.1% higher in value. The last two weeks of 2015 may have hit consecutive value records, but the number of approvals granted were nothing that special; both 2013 and 2012 recorded higher levels in volume terms, and the 2015 volume for that final week is still -30% below the alltime record set in 2006.
We get the next dairy auction results next Wednesday. The last futures market indications are for another small rise, and if it turns out that way, that will make it three in a row and seven of the last ten.
There is still no price difference between the US WTI benchmark and the Brent benchmark. Both are up $1 today of a colder weather turn in the northern hemisphere, now at US$37.70/bbl.
Gold is a higher in trading in New York, now at US$1,080/oz.
UST benchmark 10yr bond yields is rising in New York today and are now at 2.27%. Yesterday’s small fall saw our own swap rates slip -2 bps across the curve. If today’s New York rise holds, that is likely to be reversed when markets open here.
The NZ dollar starts today stronger at 68.7 USc in very thin trading, at 94.2 AUc, 62.9 euro cents and against the British pound were are 46.4p. The TWI is up at 73.9 and this and most cross rates are approaching six-month highs.
The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here »