Here's our summary of key economic events overnight that affect New Zealand with news two more central banks signaled they will be raising rates in 2022.
But first in the US, October job openings rose far more than expected, up by 431,000 from a month earlier to just over 11 mln. September was revised up. Hires were little changed at 6.5 mln and the quit rate stayed high at 2.8% (or 4.2 mln) from a record 3% (4.4 mln) in the prior month.
Today's UST 10yr bond auction saw the Fed pull back sharply too (just like we reported on the UST 3 year auction yesterday). Despite that it was very well supported with the median yield rising to 1.45% from 1.37% at the prior event a month ago.
Fed data on consumer credit came in unexpectedly weak for October (and September data was revised down).
US November vehicle sales, the world's second largest market after China, came in little-changed in November at 12.9 mln (annual rate).
The Bank of Canada held its policy rate at 0.25% in its overnight review but sees quickly improving economic conditions domestically, and still expects to raise rates starting in the middle of 2022.
Japan reported a final Q3-2021 GDP contraction that was much worse than expected.
Japan's new prime minister is readying a plan to deny some tax breaks to big companies that do not hike wages, while boosting deductions for those that do. It is trying to boost salaries that have been stuck for about 30 years. They are looking for a +4% wage boost.
In China, Evergrande shares fell another -5% yesterday after missing a key repayment date to bondholders. Kaisa share were suspended from trading.
The Indian central bank also held its policy rate, in their case at 4.0%, at its MPS yesterday. It is 'focused on growth' and is letting its looser policies run a bit longer so their economic recovery beds in. They are expected to start hiking their policy rate in early 2022.
We think we have an inflation problem? We all know about Turkey's raging 20%+ rate, but Russia is getting up there too, reporting an 8.4% CPI rise and a five year high.
In Australia it looks like their Government is moving to require BuyNow/PayLater (BNPL) fees to be passed on to customers rather than being adsorbed by the merchants (and thereby raising the costs for everyone). That is expected to add about 4% to the cost of a BNPL transaction.
And staying in Australia, pandemic cases in Victoria jumped to 1312 reported yesterday. There are now 11,331 active cases in the state - and there were another 5 deaths yesterday. In NSW there were another 403 new community cases reported yesterday, another jump, with 3,196 active locally acquired cases, and one death. Queensland is reporting one new case. The ACT has 8 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 1.52% and up +6 bps overnight. The UST 2-10 rate curve starts today much steeper at +83 bps. Their 1-5 curve is also steeper at +99 bps, while their 3m-10 year curve is steeper as well at +148 bps. The Australian Govt ten year benchmark rate has risen +2 bps to 1.69%. The China Govt ten year bond is up +1 bp to 2.88%. The New Zealand Govt ten year is also firmer, up +2 bps at 2.39%.
On Wall Street, the S&P500 has started their Wednesday session flat. Overnight, European markets all fell about -0.8% (except London which was little-changed). Yesterday Tokyo ended up a strong +1.4%, Hong Kong was up +0.1%, and Shanghai closed up +1.2%. The ASX200 closed up +1.3% while the NZX50 caught up with a +2.1% rise.
The price of gold will start today at US$1782/oz and down -US$3 overnight.
And oil prices are little-changed at just over US$72.50/bbl in the US, while the international Brent price is up to just under US$76/bbl.
The Kiwi dollar opens today firmer at 68.1 USc. Against the Australian dollar however we are softer at 95 AUc. Against the euro we are also softer at 60.1 euro cents. That our TWI-5 starts today little-changed 72.7. We should also note that the Chinese yuan rose to a 3 year high against the USD. Against the NZD, the yuan is at an 18 month high.
The bitcoin price has slipped to US$50,401 and down -1.9% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.7%.
And please note there will be no 4pm Review later today. The whole interest.co.nz team who bring you it will be out of the office at our end-of-year function, 'reflecting' on 2021 and looking forward to 2022 - and our holidays before that. :)
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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