Here's our summary of key economic events over the long holiday weekend that affect New Zealand with news of some large, notable and strategic corporate deals underway.
But first we should note that the Chicago Fed's National Activity Index dropped to a seven month low, suggesting the American economic expansion lost momentum for a second consecutive month. Production-related indicators dragged suggesting the main reason was supply-chain issues, while sales, orders, and inventories and employment-related indicators all rose.
Meanwhile, the Dallas Fed factory survey was all positive in October, although the cost pressure being noted there is extreme.
In San Francisco, sneaker brand Allbirds is preparing an IPO worth NZ$375 mln and valuing the company at NZ$2.8 bln (and about the same size as Chorus). It's a major success story based on a Kiwi development of merino wool for running shoes.
And in other corporate news, rental car heavyweight Hertz has made the single-largest purchase ever for electric vehicles, ordering 100,000 Teslas, worth about US$4.2 bln of revenue for the carmaker.
In China, a data point to note. A quarter of all economic activity in the whole country happens in the Shanghai area and the Yangtze River Delta region. It is a strategic concentration that makes Beijing uncomfortable which is why they are promoting the expansion of the Pearl River Delta, where Hong Kong is located.
Taiwan's September industrial production hit yet another new record high, and the year-on-year growth remains very high. Their retail sales actually expanded (minimally though it might have been), reversing three months of quite sharp reductions.
In Germany, business confidence fell yet again in October, the lowest level since April and slightly below market expectations as supply bottlenecks continued to weigh on Europe's largest economy. Expectations for the coming months were significantly more pessimistic too.
(In Turkey, their president's outburst to kick out ten ambassadors has been reversed.)
On the weather front, we should note that it looks like the La Niña weather pattern is settling in for a longer stint this time. The pattern is getting strong about the time it usually turns to El Niño. The last time we had an extended La Niña pattern was in 2010 - 2012.
In Australia, their Government is tipping in NZ$2.2 bln of public money to 'encourage' Telstra to buy the Pacific operations of Digicel. The alternative is that Digicel will be owned by China. Digicel is the South Pacific's main cell phone network.
And staying in Australia, Delta cases in Victoria have reduced to 1461 reported there yesterday, and so a real improvement finally. There are now 24,831 active cases in the state and there were another 7 deaths yesterday. In NSW there were another 294 new community cases reported today with 4,515 active locally acquired cases which is slightly lower, and they had four deaths yesterday. Queensland is reporting zero new cases. The ACT has 9 new cases again. Overall in Australia, more than 73% of eligible Aussies are fully vaccinated, plus 14% have now had one shot so far.
On Wall Street, the S&P500 has started their Monday session +0.5% firmer and again touching record high levels. Overnight, European markets were mixed with the range being -0.3% in Paris and +0.4% in Frankfurt. Yesterday, Tokyo ended down -0.7%, but Hong Kong ended flat, while Shanghai had a good day, up +0.8%. There was obviously no trade in New Zealand, nut the ASX200 ended up +0.3%.
The UST 10yr yield opens today unchanged at 1.64%. The US 2-10 rate curve is little-changed today at +120 bps. Their 1-5 curve is flatter at +106 bps, while their 3m-10 year curve is also flatter at +158 bps. The Australian Govt ten year benchmark rate is lower by -1 bp at 1.76%. The China Govt ten year bond is unchanged at 3.00%. The New Zealand Govt ten year is holding its new higher level at 2.44%.
The price of gold will start today up +US$15 at US$1807/oz.
And oil prices are softish, down -50 USc to just under US$83.50/bbl in the US, while the international Brent price is unchanged at just on US$85/bbl.
The Kiwi dollar opens today marginally firmer at 71.6 US. Against the Australian dollar we are softer at 95.6 AUc. Against the euro we are firmer at 61.7 euro cents. That means our TWI-5 starts today at just under 75.1, and still well over the top of the 72-74 range of the past eleven months.
The bitcoin price is also up +5.6% since this time yesterday, and now at US$63,648. Volatility over the past 24 hours has been high at just over +/-3.3%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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