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Hello. I’m David Chaston with Ninety at nine, brought to you by interest.co.nz. This
is where you get everything you need to know in 90 seconds at 9 o’clock, including news
there are advantages to being far away from Europe.
In the US, manufacturing expanded faster than expected in February, a sign industry overcame
bad weather across much of the country. Similar measures in the eurozone were slightly lower
on a weaker German result, although the trend is higher (France is closer to ending its
five month contraction, but not quite there yet). In China, their contraction grew. (This
China PMI is of smaller enterprises; the official PMI released yesterday was also lower but
still expanding and is for large enterprises.)
Worldwide, factory expansions accelerated, hitting a 34 month high although that growth
is largely on the back of the strong US data.
In Europe, the Ukraine effect is having significant market consequences. The Russian rouble has
taken a very sharp fall and the Russian central bank has raised its benchmark interest rates
by 150 bps to try and stem the falls. The Russian PMI is trending down badly.
European CDS spreads have jumped sharply overnight. German gas prices have surged, and some firms
there are planning to go off-grid, a move that is worrying authorities.
Back in the US car sales were higher in February. Retail sales - personal consumption spending
- in January were up more than expected as incomes grew, reversing the late 2013 trend.
However that spending was more for services than physical goods.
In Australia, some of their biggest resources companies could lose a major investor if Norway
proceeds with a plan to ban its vast oil-fuelled sovereign wealth fund from investing in coal,
gas and, ironically, oil.
The political turmoil has seen equity markets fall in New York, UST benchmark 10yr bond
rates fell too and are now at 2.62%, and oil and gold rose in price sharply. Gold has jumped
US$30/oz and oil is up almost US$2/barrel.
Through all this, the NZ currency has fared very well avoiding any sharp changes. We start
today at 83.7 USc, 93.7 AUc and the TWI is virtually unchanged at 78.6.
I’m David Chaston and that was 90 at nine, brought to you by interest.co.nz.