sign up log in
Want to go ad-free? Find out how, here.

US housing markets recover; ECB may buy corporate bonds; China growth slows, on purpose; UST 10yr 2.21%; oil lower; mortgage rates fall; NZ$1 = US$0.797, TWI = 77.3

US housing markets recover; ECB may buy corporate bonds; China growth slows, on purpose; UST 10yr 2.21%; oil lower; mortgage rates fall; NZ$1 = US$0.797, TWI = 77.3

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that both stocks and gold are higher, while oil and bond yields - and our mortgage rates - are lower.

But first, the run of improving American data is continuing. Sales of previously owned homes climbed in September to the highest level in a year, and beating analysts estimates. This is yet another data marker pointing to growing confidence in the US economy as employment firms.

In Europe, Reuters is reporting that the ECB is considering buying corporate bonds on the secondary market and may decide on the matter as soon as December with a view to begin buying early next year. So far they have only tentatively bought bank's covered bonds. German disquiet is impeding their lurch into full-blown QE.

China’s growth decelerated in the third quarter to its slowest pace in more than five years, as a pick-up in exports failed to offset the impact of a slowing property market and sluggish manufacturing sector.

But for all that, the result was better than analysts had expected and that gave a small boost to currencies like the AUD and NZD. In fact, it is important to acknowledge that part of China's slowdown is by design and that is why markets are giving China the benefit of the doubt at the moment.

In New York, however, stocks are up in mid afternoon trade, pushed along by better than expected earnings reports. Even European stocks are higher, in their case helped by those ECB corporate bond buying rumours.

UST 10yr yields are again virtually unchanged at 2.21%. In New Zealand this morning we start with wholesale swap rates sharply and somewhat surprisingly lower.

And this morning, both Westpac and ANZ followed Kiwibank and BNZ in lowering some key home loan rates. In fact, ANZ matched Kiwibank's market leading one year rate. The difference between the two is that ANZ's is a 'special' with LVR and other conditions while Kiwibank's offer doesn't have those restrictions.

The oil price is still under US$83/barrel with the Brent price now just under US$86/barrel. In mid afternoon trade in New York, these prices are slipping.

The gold price is up, now at US$1,250/oz. That is a six week high and the yellow metal is now in a clear up trend.

We start today with our currency level virtually unchanged. The NZD is at 79.7 USc, at 90.6 AUc, and the TWI is at 77.3.

If you want to catch up with all the changes on Friday we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »

Daily exchange rates

Select chart tabs

Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
End of day UTC
Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

4 Comments

Why does Gold go up when there is uncertainty?

Its a soft basically useless metal and all its industrial applications and uses all have cheaper ( and often better) subsitutes

 Basically it has no  use other than adornment of Women

Up
0

Mr T would argue with you on that

Up
0

Governments can't print gold, they can't turn gold into Agentinian pesos overnight, and it's value isn't subject to the woes of individual states.  Though it can be confiscated by force, that's true also of fiat money, and you can always hide gold.

Up
0

Short term I'd suggest the biggest driver is human behavior which frankly often seems contradictory and plain mad.  So we have the inflationistas/Austrians who think QE will produce inflation, gold is seen as a protection.  NB Interesting thing is many gold mines have a cost per tonne rather close to the present price so if the price drops say under $1k, maybe $800US then we might find we are not mining very much, as mines close for ever, an economic peak in gold in effect.

Otherwise there are the deflationistas such as myself who minimise debt and hold cash like things, not gold.

Otherwise, yes I see it as a huge loss of energy/work to extract and pointless.

Gold is still heavily used in electronic chip manufacture?

 

 

 

 

Up
0