Here's our summary of key economic events overnight with news markets are handling the Ukraine situation calmly so far.
As Ukraine braces for open war as Russian forces move deeper into their country, the rest of the world is bracing for the economic impacts however, which is including aggressive cyber war. RT is central to their global disinformation push. Spillover will no doubt affect New Zealand at some point.
EU and US sanctions are hitting the value of the ruble (its now at an all-time low) and the yield on Russian bonds (with the 10yr now approaching 11%). Their 9% inflation rate is expected to rise. Even though current sanctions only formally hit Putin loyalists (the oligarchs), they will still have a tough impact on ordinary Russians. And there will be loud echoes in EU and other global financial markets too.
Meanwhile in the US, retail sales growth continued its strong recent expansion last week, still rising far faster than CPI, so it is still recording 'real' volume gains.
Mortgage applications fell sharply last week, down to their lowest level in more than two years as their benchmark 30 year mortgage interest rate continues its slow but relentless push higher.
Today's tender of US$62 bln of UST 5yr bonds was well supported, but the yield rose from 1.49% at the equivalent tender last month to 1.83% pa today.
January industrial production in Taiwan continued its impressive run up +10.0% and rising faster than for December. Even more impressive is a resurgence in retail sales in the country, up +6.4% from the same month a year ago when inflation is rising +2.8% over the same period.
EU inflation was up +5.1% in January, with both Germany and Italy recording the same (on a harmonised basis) but France was at +3.3% and Spain at +6.2% rounding out the major four economies in the block.
One thing the Ukraine crisis is doing is raising global food prices. Wheat, a major Ukrainian export, it now trading at a nine year high, up almost +30% in a year. It has big implications for bread prices. It isn't the only commodity rising; palm oil and soybeans are too.
China is on a self-sufficiency program - again. There seems little in this latest push different to all the others.
In Australia, their wage index was up, up +2.3% year-on-year. But that is not strong enough to make a June rate hike more certain than not.
In NSW, there has been 8,931 new community cases reported yesterday, now with 100,745 active locally-acquired cases, and another 6 daily deaths. There are now 1,246 in hospital there and holding. In Victoria they reported 6,926 more new infections yesterday. There are now 42,016 active cases in that state - and there were also 18 daily deaths there. Queensland is reporting 6,301 new cases and 37 (not a typo) more deaths. In South Australia, new cases have fallen to 1378 yesterday and 3 more deaths. The ACT has 946 new cases and no deaths, and Tasmania 842 new cases and no deaths. Overall in Australia, more than 25,000 new cases have been reported.
The UST 10yr yield opens today at 1.98% and up +5 bps. The UST 2-10 rate curve starts today a touch flatter at +39 bps. Their 1-5 curve is also flatter at +75 bps but their 30 day-10yr curve is steeper at +195 bps. The Australian ten year bond is up +2 bps at 2.26%. The China Govt ten year bond is down -3 bps at 2.83%. But the New Zealand Govt ten year is up sharply, up +10 bps at 2.80%. There was a loud echo in swap rate markets yesterday after the hawkish RBNZ signals with the two year reaching a six year high.
Wall Street has opened slightly lower, down -0.2% in its Wednesday afternoon session. Overnight European markets fell a similar amount except London which was flat. Yesterday Tokyo was on holiday, Hong Kong gained +0.6% and Shanghai gained +0.9%. The ASX200 ended its Thursday session up +0.6% and the NZX50 ended up +0.2%.
The price of gold starts today at US$1910/oz and up another +US$7 from this time yesterday.
And oil prices are down -50 USc at just under US$91.50/bbl in the US, while the international Brent price is just over US$94/bbl. But it has been a rollercoaster ride for oil in between.
The Kiwi dollar will open today up another +¼c at 67.8 USc. Against the Australian dollar we are up slightly at 93.6 AUc. Against the euro we are also firmer at 59.9 euro cents. That means our TWI-5 starts today at just on 72.2 with another daily gain and the first time it has been over 72 in five weeks.
The bitcoin price has risen +2.2% since this time yesterday and now at US$38,670. Volatility over the past 24 hours has modest at +/- 1.1%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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