Obama & Auto Industry Headline Follow-Up
Relayed from a senior Obama administration official, stating that the situation with GM has not changed since Monday and that the White House wants a 60 day window for GM and a 30 day window for Chrysler to let things “play out.” In addition a report earlier that bankruptcy for GM is the most suitable option was not accurate.
GM stated that it will take whatever steps are necessary to successfully restructure the company. It will use the 60 day window presented by the Obama administration to restructure with unions, bondholders and other stakeholders. Consequently, the European majors rebounded off the lows against the USD on this report.
Australian Retail Sales
Australian Retail Sales fell unexpectedly by 2.0% month over month for February, much lower than the expected half-percent drop. The Aussie took a mild hit on this report, as USD counterparts have been selling off on Obama’s earlier comment.
Obama to Let Detroit Go Bankrupt
The Yen and the US Dollar received a strong bid after a headline from Barak Obama saying that he may let automakers go bankrupt. Stay tuned for a follow up report.
Japan’s Tanakan Reports
The Japanese Tanakan manufacturing reports were released as follows:
Large Manufacturing Index (1Q) – Survey: -55 Actual: -58 Prior: -24
Manufacturing Outlook (1Q) – Survey:-52 Actual:-51 Prior:-36
Non-Manufacturing (1Q) – Survey:-25 Actual:-31 Prior:-9
Non-Manufacturing Outlook (1Q) – Survey:-25 Actual:-30 Prior:-14
Large All Industry Capex (1Q) – Survey:-12% Actual: -6.6% Prior:-0.2%
Australian Skilled Vacancies
Australian Skilled Vacancies was down -10.8% month over month, worse than the prior reading of -11%, which was revised down further (-11.7%.)
Australian AIG Performance of Manufacturing Index
The AIG Performance of Manufacturing Index came in better for March at 33.4 than the prior month (31.7.) The Aussie has had no reaction to this release.
Continuation of this morning’s asian trend and information on Non farms.
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RBNZ’s Bollard on the newswires
- RATES TO REMAIN RELATIVELY LOW FOR PERIOD
- RISE IN LONG-TERM RATES UNWARRANTED
- ECONOMIC OUTLOOK WEIGHTED ON DOWNSIDE
- ECONOMIC RISKS ARE ON DOWNSIDE
- CONCERNED OVER LONG-TERM WHOLESALE RATE STRENGTH
His comments seem to suggest he is not all that happy with the rise rates nor in the rise in the NZDUSD. For the month just ended the NZDUSD rose by 14% versus the USD. Given the back up in yields, it seems as if he is concerned about a false confidence in the economy which is contributing to the higher currency and interest rates. If rates were to fall in NZ it would generally come with a lower currency as well.
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