Here's our summary of key economic events overnight that affect New Zealand with news we have an Omicron bounce in markets today, reversing the Omicron fall over the past ten days. Markets seem convinced the new virus strain will not upend things in the way they first feared.
There is a general risk-on mood in most global markets, although that is not evident in Asian markets.
In the US, a senior Treasury official said it is about to crack down on "criminals, kleptocrats and others" paying cash for houses to launder money as part of a broader anti-corruption drive.
German factory orders slumped in October after a small rise in the prior month. This was a retreat far sharper than expected. In was driven by a sharp fall in export orders, which were down -13% on an annualised basis.
An updated ranking of the 'power' influence among 26 Asian-related countries shows that New Zealand slipped -1 place to 13th, above Taiwan, but lower than Vietnam. Australia is #6 and slipped as well. The big mover is China #2 which recorded its first-ever retreat and is now further behind the US which is still #1 and rising. Overall, Asian power fell in 2021 on a global basis.
In a meeting with the head of the IMF, Chinese premier Li Keqiang was at pains to point out that they will likely cut their reserve requirement ratio (RRR) rates if the property slowdown requires policy action and their overall economy staggers for much longer. They are currently focused on keeping liquidity levels elevated. And overnight, they did, reducing the RRR from 8.9% to 8.4%. It should release ¥1.2 tln in funding (NZ$280 bln) to help their sagging economy.
And Evergrande shares fell -19% in yesterday's trading, taking the fall from July 2020 to -93%.
According to updated OECD comparisons, Australians are paying more personal income tax as a share of government revenue than any other advanced economy, except for the high-taxing Scandinavian welfare state of Denmark. New Zealand is the 5th highest in these comparisons. (See page 8.)
In Australia, pandemic cases in Victoria were 1073 reported yesterday. There are now 16,503 active cases in the state - and there were another 6 deaths yesterday. In NSW there were another 208 new community cases reported yesterday, a jump, with 3,036 active locally acquired cases. Queensland is reporting zero new cases. The ACT has 6 new cases. Overall in Australia, just over 88% of eligible Aussies are fully vaccinated, plus a bit under 5% have now had one shot so far.
The UST 10yr yield opens today at 1.43% and up +7 bps overnight and rising. The UST 2-10 rate curve starts today a tad steeper at +78 bps. Their 1-5 curve is also much steeper at +93 bps, while their 3m-10 year curve is up at +135 bps. The Australian Govt ten year benchmark rate has risen +2 bps to 1.57%. The China Govt ten year bond has fallen a very sharp and unusual -8 bps to 2.84%. The New Zealand Govt ten year is also lower, down -5 bps at 2.30%.
On Wall Street, the S&P500 has started their Monday session up +1.1%. Overnight, European markets all rose about +1.5% in their various sessions, Yesterday Tokyo ended down -0.4%, Hong Kong was down -1.8%, and Shanghai closed down -0.5%. The ASX200 closed flat while the NZX50 shed -0.6%.
The price of gold will start today at US$1778/oz and down -US$6 overnight.
And oil prices are up +US$2 at just over US$68/bbl in the US, while the international Brent price is up a bit more and now just under US$72/bbl.
The Kiwi dollar opens today little-changed at 67.5 USc. Against the Australian dollar however we are softer by -½c at 95.8 AUc. Against the euro we are also unchanged at 59.8 euro cents That means our TWI-5 starts today at 72.4 and little-changed.
The bitcoin price has risen to US$49,182 and +1.3% firmer than the level at this time yesterday. A survey by Grayscale says that more than half of all bitcoin holders came to the crypto within the past 12 months. Churn is very high. Volatility over the past 24 hours has been moderate at just over +/- 2.5%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».