Dollar sliding. For a while there yesterday, it looked as though some commentators had lost their heads and were cackling wildly about how the change of wording about the dollar and the apparent abandoning of an “easing bias” in yesterday’s post-meeting statement from RBA governor Glenn Stevens had sent the dollar higher. But in reality what he said wasn’t far from the truth — the dollar has been slowly moving lower as commodities have been sold off, especially in July. What all the headless chooks among the commentariat ignored was the 5%-plus slide in the value of the Aussie dollar in July, in reaction to the fall in commodity prices (even if iron ore prices were firmer). So the dollar responded (helped also by the stronger-than-expected retail sales figures for June) by rising strongly, back over 73 US cents and over 74 US cents, especially if the current sell-off. But then the Aussie ran back under 74 US cents after a senior member of the Fed all but declared the September meeting would bring the first rate rise from the US since 2006. — Glenn Dyer

Kiwi milk shock. First it was the continuing housing bubblette in Auckland, now it’s the slide in global milk prices, which is raising the prospect of recession in 2016. Suddenly life in New Zealand’s hot and cold economy is getting rougher by the day, especially for companies of all sizes, farmers, the Key government and the country’s central bank (and for our big four banks — ANZ, CBA, Westpac and NAB, which dominate NZ like they dominate Australia). The problem for the Kiwis is their utter dependence on dairy products. It’s great being a dominant global producer, especially in a boom. But when the markets turn, it’s like being a rabbit in the headlights of an approaching truck, and right now the Kenworth is bouncing right over them. Overnight the latest global dairy auction conducted by Fonterra, the world’s biggest dairy exporter, brought the 10th fall in prices in a row (the auctions are conducted every fortnight). The average price of milk products fell 9.3%, a crushing blow to the already embattled sector, especially after the 10.7% slump a fortnight earlier. That’s a fall of 20% in the space of a couple of weeks and 63% from their peak in 2013. The impact on the Kiwi economy will be to strip an estimated NZ$10 billion or more from national income in the next year — so it’s no wonder fears about a recession are rising. — Glenn Dyer

Unlimited leave at Netflix. On a day when Apple shares pushed the US sharemarket lower with another six-month low (and a fall of 3.1%), shares in the streaming video giant Netflix soared 8% to a new all-time high of US$122.79 during trading. There was no apparent market-sensitive news for this record surge, apart from a post on the company’s blog from chief talent officer Tawni Cranz, who wrote that the company has introduced an unlimited leave policy for new parents, allowing them to take off as much time as needed during the first year after a child’s birth or adoption. In a move that will ease many of the fears associated with work and/or finances after birth, Cranz said the policy would allow employees to return on either a part-time or full-time basis. Netflix, which also allows unlimited vacation time, said employees would continue to receive their normal pay. Cruz wrote:

“Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field. Experience shows people perform better at work when they’re not worrying about home. This new policy, combined with our unlimited time off, allows employees to be supported during the changes in their lives and return to work more focused and dedicated.”

And to think we in Australia are moaning and groaning over legalistic parental leave schemes, penalty rates and other ephemera of the industrial relations battlefield. That rise in the Netflix price took its value to US$48.7 billion, a rise of US$3.5 billion. So investors were so worried about the move that they pushed the company’s shares to a record high. Might be something in employee-friendly policies? — Glenn Dyer

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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