Here's our summary of key economic events overnight that affect New Zealand, with news New Zealand's ambitions to be a green hydrogen superpower are making real progress.
But first up we should note that today is a national holiday in the US, "Juneteenth", commemorating the end of slavery, an end that started in Texas in 1865. (Until last year, it had only been a regional holiday.)
Meanwhile, Chinese authorities reviewed their Prime Loan rates yesterday, and left them unchanged. In late May, their Premier released a 33-point rescue package to avoid an economic contraction in Q2-2022. But rate hikes by global central banks make it difficult for them to ease monetary policy to boost a weak domestic economy. However, analysts expect rate cuts in the second half of 2022 anyway.
The impact of that package of stimulus measures hasn't kicked in yet. One consequence may be that with car sales struggling there, the lithium price is wavering. A sudden new rush in supply seems to have overwhelmed demand and a price correction is expected soon.
And the Chinese price of iron ore is still sinking. And that isn't helping the share price of Aussie miners.
This weakness is also showing up in Chinese consumer sentiment. The latest data released officially is for April and that showed their survey reporting a very sharp drop in confidence from a positive +13 in March to -13 in April. In a record that goes back to 1991, we have never seen a plunge like this in the official survey. Kudos to them for actually releasing such survey data that shows a vast leakage in confidence in the Middle Kingdom.
After a surprise dip in April, Taiwanese export orders bounced back to +US$55 bln and +6.0% higher than a year ago. Orders from American and ASEAN customers were very strong. They were very weak from China and have been all year, a traditional source of strength.
Annual producer price inflation in Germany surged to almost +34% in May from the same month a year ago, breaking a new record peak for a 6th straight month and fractional higher than in April or market forecasts. The figures reflect the effects of the Ukraine war so they are not really a surprise.
In key progress for Southland, Southern Green Hydrogen, a joint venture between Contact Energy and Meridian, has announced that Western Australia's two largest miners would enter final negotiations to develop what could be the world’s largest green hydrogen plant with a reported cost of about NZ$5 bln.
The UST 10yr yield has started the week unchanged at 3.23%. The UST 2-10 rate curve is marginally flatter at +6 bps and their 1-5 curve is unchanged at +48 bps. Their 30 day-10yr curve is also unchanged at +205 bps. The Australian ten year bond is up +4 bps at 4.12%. The China Govt ten year bond is -2 bps lower at 2.81%. And the New Zealand Govt ten year will start today -6 bps lower at 4.23%.
The S&P500 futures indicates Wall Street will open in its Tuesday session about +1.1% above the level it closed at last week. Overnight in Europe, that positive mood prevailed too with markets up more than +1%. Tokyo closed yesterday down -0.7%, Hong Kong was up +0.4%, and Shanghai closed flat. The ASX200 ended its Monday session down -0.6% while the NZX50 ended unchanged.
The price of gold ended yesterday at US$1836/oz and down -US$4.
And oil prices are little-changed from this time yesterday to just over US$108.50/bbl in the US, while the international Brent price is now just over US$112/bbl.
The Kiwi dollar will open today at just on 63.2 USc and +20 bps firmer than this time yesterday. Against the Australian dollar we holding 91.1 AUc. Against the euro we are also holding at 60.2 euro cents. That all means our TWI-5 starts today at just under 71.3, a gain solely due to the retreating greenback.
The bitcoin price has moved sideways from this time yesterday and is now at US$19,866 and up +2.4%. Volatility over the past 24 hours has been very high again at +/- 4.2%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».