Here's my summary of the key news overnight in 90 seconds at 9 am, including news of diverging market fortunes.
Overnight, in the final trading sessions for July, global stocks sank by the most in almost five months.
This was driven by some disappointing earnings reports - especially from those with Russian or European exposures - and credit market concerns after Argentina defaulted and a Portuguese bank was ordered to raise capital. The oil price slid sharply and the US dollar strengthened.
These nerves appeared even as American labour costs showed good gains in data out overnight. They were the largest gains since the third quarter of 2008. This is a key Fed labour market gauge and is being closely watched for clues on the timing of their first interest rate increase. Fed officials acknowledged the improvements, but said "significant underutilisation of labor resources" remained.
Tomorrow mornings American Non-farm Payrolls report will be critical in setting the direction for next week. Markets are expecting a 230,000 gain in employment and the unemployment rate to hold at 6.1%. We get our own look at June employment on Wednesday next week.
In addition to Argentina and the new Portuguese bank stress, perhaps the eurozone fall in their CPI to +0.4% pa has markets worried too. Another step towards deflation was revealed in data out overnight. This has occurred despite relatively radical action from the ECB recently.
In mid-afternoon trade today, UST 10yr yields were holding at 2.55%.
The oil price has fallen sharply today on the US benchmark and is now under US$99/barrel. Overnight, the first exports of US oil in 40 years sailed for South Korea. On the Brent benchmark it is now under US$106/barrel. Gold also fell sharply and is now at US$1,283/oz.
We start today with the NZ dollar holding its own against a stronger US dollar. We are now at just under 85.0 USc, just under 91.4 AUc. The TWI is at 79.7.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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