Wednesday, March 9, 2016

One more 'adrenaline shot' likely for eurozone; New Zealand cuts interest rates to record low; Pets & debts: How millennials spend their pay cheques

1 One more ‘adrenaline shot’ likely for Eurozone (Straits Times) With inflation now back in negative territory and the economic outlook clouding over, the European Central Bank is widely expected to give the eurozone another "adrenaline shot" of stimulus measures, analysts said.

Moves announced by the ECB back in December were perceived by the financial markets as being half-hearted. So, ECB chief Mario Draghi is set to announce bolder measures at his traditional post-meeting news conference this time, central bank watchers predicted.

These would likely include a further cut in interest rates, an increase in the volume of bonds it buys each month under its so-called quantitative easing or QE programme and possibly a further extension of that measure beyond its current timeframe of March 2017.

With area-wide falling inflation back in negative territory in February for the first time in five months - it fell to minus 0.2 per cent - and eurozone growth not expected to pick up speed any time soon, the case for further stimulus measures is clear, analysts agreed.


2 New Zealand cuts interest rates to record low (BBC) In a surprise move, the Reserve Bank of New Zealand (RBNZ) has cut its lending rates for the fifth time since June last year to a record low of 2.25%. The bank said the 25 basis point cut was due to global growth worries and weaker demand from China - an important trade partner.

New Zealand is the world's largest dairy exporter but the sector has been facing some challenges. The central bank signalled it could cut rates further to help boost growth. The RBNZ last cut rates in December from 2.75% to 2.5%, saying the country's economy had softened in 2015. At the time, central bank governor Graeme Wheeler said he was positive about the outlook for inflation and economic growth for 2016.

However, as he announced the bank's latest cut, Mr Wheeler said the outlook for global growth had worsened since the December cut "due to weaker growth in China and other emerging markets, and slower growth in Europe."

Agriculture is an economic mainstay in New Zealand, particularly its dairy sector. The country exports some 95% of its milk production, with 87% of that collected by Fonterra, the world's biggest dairy exporter. But New Zealand's dairy exports have been hurt by falling prices internationally together with a slowdown of its major trading partner China - a big buyer of its dairy products.


3 Pets & debts: How millennials spend their pay cheques (Mahita Gajanan in The Guardian) The millennial lifestyle – cord-cutting, wasteful, feckless and more concerned with ordering an Uber than the death of the auto industry – has been the subject of much criticism. While there is no question that millennial habits are reshaping the global economy, it is also shaping them: finding a job after college is not guaranteed and many struggle to repay student loans. Here, a few say how they make ends meet:

Nectar Odabashian, 23, $35,000: Nectar moved to Gloversville, New York, with her boyfriend, Rob, after graduating from Rutgers University in 2014. The couple chose the upstate mountain city because rent was cheap and they wanted to save money to travel.

The couple live together and pool their money to cover expenses. Rob, 27, works nights at a convenience store and makes about $800 per month. They share a 1997 Subaru Outback that Nectar says has seen better days. Nectar describes herself as a “nervous shopper” and constantly questions how each purchase she makes will affect her budget.

The couple stretch their income as far as possible. This means packing lunches for work, staying in instead of going out, and sticking to a budget. Extra money goes towards beer for the weekends and stuff for Nectar’s cats. “Our spare room is the cat’s room,” she says. She also spends about $50 a month on e-juice for her vape.

Christine Odunlami, 24, $0: Christine is living off her savings account and credit card, having lost her job as an intern for a marketing company in December. “I’m not really satisfied and it’s because I don’t have a job,” she says. “I hate being in debt, I hate owing money. Once I’m working permanently, I will be better.”

Being unemployed, Christine says it is challenging to live off her meagre savings. Before she lost her job, she was making between $400 and $600 a month and now has access to a line of credit, which is seeing her through until she finds a new job. She is living with her sister as she looks for a job in the US. Her parents cover her rent.

Brian Staub, 28, $30,000: As the father to a four-year-old girl, Brian spends $520 of his monthly paycheck on daycare. “It’s a struggle,” he says. After that, he and his wife, Stephanie, are not left with much. “We have to get groceries and stuff like that, too, and gas to get us through the week,” Brian says. “We pay the daycare, we pay the groceries for the week and hopefully we can cover one of our bills.”

Sometimes, they do not have the extra money. In those moments, Brian and his wife, who waits tables for about four to six hours a week, look for extra shifts. Stephanie brings in about $500 to $600 every two weeks. Brian is the only one of his friends who has a child, making his lifestyle a little different.

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