Tagged: NZ

The Day Today 21 Jan 2015

* Bill White, the man who predicted the financial crisis, warns the current situation is even worse: “We are holding a tiger by the tail”; and that more QE won’t work: “Sovereign bond yields haven’t been so low since the ‘Black Plague’: how much more bang can you get for your buck?”

* Greece deposit flight continues: 1bn on Monday, 850m on Tues (the record in 2012 was 2.8bn) – total deposits now 152bn, vs 150.5bn in 2012

* NZ inflation turns negative for first time in 2 years, -0.2% in Q4, unch was expected

* BOJ cut their inflation forecasts, increase their GDP forecasts, say “inflation expectations appear to be rising on the whole from a somewhat longer-term perspective”

* QE is already working? Spain issues record amount at record low: 10 yr at 1.66% yield, down from 4% a year ago

* How investors are positioned for QE (according to SG survey):
– 70% expect QE, of amounts from EUR 500bn-1trn
– Euro and bonds both not yet pricing it in
– More sellers of EUR/USD rallies than buyers – expecting 1.1000
– 19% expect Grexit
– Peripheral bond yields – some expect to fall by another third

* ML Fund Manager Survey:

– Lowest cash levels in 6 months, despite vol
– 72% expect ECB QE
– 45% see oil as undervalued, the most in 6 years
– Fed hike seen in Q3 from Q2 in the last survey

* Poland launches enquiry into Swiss mortgages: 550,000 Polish homeowners hold $36bn worth of CHF mortgages

* The National Futures Association is considering whether to review leverage limits for FX trades

The Day Today 15 Dec 2014

* Abe retains his super-majority: ‘We heard the voice of the people saying ‘Move forward with Abenomics” though on a record low turnout, 53.3% vs 59.3% last time

* This story not going away, it resurfaces every time everyone thinks the task is just too hard for Draghi and he will up sticks and take up the position as President of Italy rather than carry on withe President of the ECB
* FT continues with the theme of internal divisions at the ECB and that there is a debate over whether QE would be open-ended (unlikely given German Constitutional Court)

* Last week was the worst week for the Dow Jones in 3 years (-3.8%) – finally responding to the sell-off in junk bonds that was kick-started by the sell-off in high-yield oil and energy bonds

* Bill Gross thinks lower oil prices can only be dovish for the Fed [has he been reading Dudley/Fischer comments on how it’s good for growth?!]

* Japan Tankan – solid report, including capex +8.9%, from +8.6%

* Latest Greek polls show narrowing of Syriza’s lead

* RBNZ update their measure of the trade-weighted NZD: number of currencies increased from 5 to 17 and based off Oct 31st 2014 level

* Uber-dove Kocherlakota obviously didn’t enjoy being in the dissenter’s corner last month, as he has announced he won’t seek reappointment when his term ends in 2016

* Cameron apparently eyeing-up electoral ‘sweet spot’ of 2017 for EU referendum – that year will see Presidential elections in both France and Germany [this is bearing in mind that we even have a referendum then, depending on who wins UK General Election]
* UK house prices drop 3.3% in Dec, according to Rightmove

* Are Russia’s bonds the next big worry?

* Gavyn Davies: the Dark side of the oil shock

The Day Today 12 Nov 2014 (Happy Birthday Mum!)

* Abe to delay sales tax hike by 18 months and call December election, says Japanese press – later denied by cabinet ministers
* BOJ hawks coming out of the woodwork… Miyao: “I think there is a high chance the BOJ can begin specific debate on its exit strategy in the second half of fiscal 2015, which is when we see a high chance of meeting our price target”

* If you must make the balance sheet a focus, you will get articles like this: WSJ points out that the ECB’s balance sheet shrank by EUR 22bn last week, as banks paid back more in ECB loans than the ECB bought in assets

* The US Mint sells out of one ounce American Eagle silver coins, a sign that retail investors are snapping up silver following its decline by one-third since July

* Fed Rosengren says Fed should remain patient until they get the outcomes they want

* Russia’s Central Bank points out that the fall in the oil price is offset by the fall in the rouble, but they have still become more pessimistic about Russian’s growth prospects

* Poland has a new party taking part in local elections this weekend, the Alliance of Urban Movements. Their leader says: “People are tired of the same discourse, the same faces. For 25 years, not a lot has changed… their time is over”

* RBNZ Wheeler says they won’t relax mortgage restrictions before the end of the year, as he had previously envisaged, as strong immigration suggests there’s still upward pressure on the housing market

* Dilma cabinet minister resigns as battle wages over economic direction of new Brazilian government

* Ahead of next week’s talks over Iran’s nuclear capabilities, Russia signs a deal with Iran to build another 4 new reactors
* In case you missed it, Iran’s supreme leader took to Twitter at the weekend to explain why Israel should be eliminated – through a referendum of “all the original people of Palestine including Muslims, Christians and Jews”

The Day Today 17 Oct 2014

* Fed Bullard takes his message to the FT in an interview: “I do think that this global situation is serious…Europe is threatening to go into a triple dip recession and maybe even reignite the European sovereign debt crisis.” He said a pause in purchases would be a “low cost move that we could make, because purchases are already at a low level – it would buy us a little bit of optionality, a little bit of ability to take a more aggressive stance if we had to”.

* Expect more articles like this: World economy so damaged it may need permanent QE, by AEP

* Greece will stick to its plan to exit the bailout program at the end of this year with some form of precautionary support despite another day of turbulence on bond and stock markets, a senior government official told Kathimerini on Thursday.
* Eurozone officials have told Reuters that Greece appears to have second thoughts about a full-blown return to market funding

* New Zealand dollar suffered its own flash crash dropping 60 pips when this headline came out: RBNZ SAYS NZ CURRENCY LEVEL UNJUSTIFIED, UNSUSTAINABLE
before returning to its previous level on this headline: IGNORE: RBNZ SEPT. STATEMENT ON CURRENCY REPUBLISHED IN ERROR

* China 1yr swaps at 3.09%, trading down to benchmark 3% deposit rate. The last time swaps traded below the depo was 2012 when the PBOC cut rates

* Citi estimates Brent crude oil under $80 is equivalent to $600 for each US household

* BOJ Governor not worried about oil price fall hitting inflation because ‘in a medium- to long-term perspective, prices are gradually rising reflecting improvements in the output gap and heightening inflation expectations’
On the GPIF reform:
* Welfare Minister Shiozaki tries to reassure: says he bought stocks for himself once for educational purposes while working at BOJ {NSN NDKBVI6K50Y9 <go>}
* GPIF advisor Ito: fund would be “stupid” to announce its new investment strategy before adjusting asset allocations {NSN NDKCSX6K50XU <go>}

* El-Erian fears he has created a monster by coining the phrase ‘New normal’ – it’s now so widely accepted that policymakers are resigned to slower growth and won’t do anything about it

*UK head of counter terrorism: “The volume, range and pace of counter-terrorism activity has undergone a step-change,”

* Russia spent 3bn on defending the rouble last week, 2bn the week before, FX reserves are down 10pc this year

The Day Today 30 September 2014

It’s month end, and impact of PIMCO adding to general sense of jitters. EM currencies and stock markets all under pressure yesterday, while the US 10yr fell back under 2.50%.

* RTRS poll: 200bn ABS/covered bond purchases expected from the ECB
* Hans-Werner Sinn urges German citizens to petition the German Constitutional Court to stop ECBs asset purchase programmes, in a sharply worded FT op-ed

* Evidence thus far on the sales tax hike is unconvincing, Japan data still mixed: Japan’s Output Unexpectedly Slumps as Retail Sales Rise

* Tourism and retail are 10% of Hong Kong GDP and this week is China’s big Golden Week holiday. ‘Travel agents are reporting up to 30% drop in inbound Chinese tour groups’

* Brazil’s Rousseff extends lead over Silva in election poll, hitting the BRL and stock mkt yesterday

* US poised to become world’s leading liquid petroleum producer

* US consumers feel better about their personal finances and job security than they have since this survey began in 2009

* Half of Fed interest paid on reserves goes to foreign banks, according to WSJ study [Hilsenrath gets patriotic?!]

* Dove v Hawk: Fed’s Evans wants to raise rates in 2016; Fisher prefers spring 2015 to the summer

* Spanish Court Blocks Catalonia Independence Referendum [as exp]

* John Redwood warns businesses that they will pay a “very dear economic and financial price” if they come out in favour of staying in the EU, and tells them not to “meddle in politics”

* Not just the RBA who want a weaker Aussie dollar, the chief of Qantas wants it at 0.8000
* Finance Minister English says RBNZ will be happy to see the New Zealand dollar decline and a falling kiwi lessens the headwinds {fifw NSN NCOFQE6TTDS5 <go>}