Here's our summary of key economic events overnight that affect New Zealand, with news the world's factories aren't the driving force they once were.
But first, hanging over today is an imminent visit by a senior US politician to Taiwan, much to Beijing's fury and accompanying threats. It is a tense flash-point right now.
Separately, global factories are now reporting their upturn has stalled as production stagnates and new orders contract. But price inflation and supply chain pressures brought signs of easing. Business optimism fell to a 26-month low in July. Growth is strongest in India, Australia and the US while the EU is struggling.
In the US, both the major July PMI reports said new order levels fell in the month, taking the shine right off their factory expansion. Both are still expanding however as they work through large order backlogs. A dip in new orders isn't unusual as they head into their summer holiday season however and was less than expected. Equally notable is the easing of price pressure, recorded in both reports. The widely-watched ISM one called the July pullback "slight", but the internationally benchmarked Markit one noted the sharp easing of demand.
But four of the six biggest manufacturing industries - Petroleum & Coal Products; Computer & Electronic Products; Transportation Equipment; and Machinery - all still registered moderate-to-strong growth in July.
Defying the Chinese official version which has its factory PMI slip into a contraction, the private Caixin PMI fell but not into contraction. But this fall was more than expected. There were softer increases in output and new orders, employment fell at a quicker pace as firms cut back, and input cost inflation slowed notably, with prices charged falling again.
In Hong Kong, they have fallen into a second recession in 3 years as pandemic restrictions sting their economy which fell -1.4% in Q2 and further weakening its status as a vibrant financial hub.
And staying in Hong Kong, crisis-hit Chinese property giant Evergrande says that one of its subsidiaries has been ordered to pay US$1 bln for failing to honour its debt obligations.
In Japan, factories are still expanding at a modest level but the momentum is slowing.
In Taiwan, they suffered their steepest falls in output and new orders for over two years as their factory sector suddenly contracted in July.
India is a bright spot, recording a rare rise in their expansion, which is now bubbling along at a solid moderate rate.
That is quite the contrast to Europe where they slipped into a minor contraction in July, their first in more than two years. And that was the case for both Germany and France. Generally among other countries there, northern Europe is still expanding while southern Europe isn't.
Not helping is a sharp drop in German retail sales volumes, which although it was expected, came in at the bottom end of forecasts. The Germans are hunkering down ahead of a tough period expected to start in a few months.
Latvia is already in a tough situation as it has become the latest in a string of European countries to be cut off from its supply of Russian natural gas from Gazprom. But the Latvians say they are still buying Russian gas from unnamed 'others'.
Most think the EU has just three months to build resilience to a full winter cut-off of Russian gas. Progress is frantic everywhere and the signs are now reasonable that a unified EU will be able to cope.
The first of the two Australian factory PMIs was released yesterday, and it shows little change with a good moderate expansion continuing. The other local version recorded a decline to a more modest expansion.
And Australian house prices are losing altitude quickly. The CoreLogic home value index, covering the eight major capital cities, fell -1.4% in July, following a -0.8% slip in June and a -0.3% dip in May. The July fall is the largest monthly decline since 1983 and both Sydney and Melbourne are leading the way down.
At the end of today, we will get the August review by the Australian central bank. They are widely expected to raise their cash rate target by another +50 bps to 1.85% at about 4:30 pm this afternoon.
The UST 10yr yield starts today at 2.61% and down -5 bps from this time yesterday. The UST 2-10 rate curve is more inverted today, now at -29 bps and their 1-5 curve is slightly more inverted, at -31 bps. Their 30 day-10yr curve is now at +40 bps and flatter than this time yesterday. The Australian ten year bond is up +2 bps at 3.09%. The China Govt ten year bond is down -2 bps at 2.75% and near is low for the year. And the New Zealand Govt ten year will start today up +2 bps at 3.42%.
Wall Street has opened its week -0.5% lower. Overnight, European markets closed down a minor -0.1% softer. Yesterday Tokyo ended with a +0.7% gain, Hong Kong with a +0.1% recovery after a weak opening. And Shanghai ended with a +0.2% gain, also after a negative start. The ASX200 ended up +0.7% and the NZX50 ended up +0.3%.
The price of gold opens today at US$1769/oz in New York which is up +US$2 from this time yesterday.
And oil prices start -US$5 lower at just over US$92.50/bbl in the US, while the international Brent price is now just over US$99/bbl.
The Kiwi dollar opened today firmer from this time yesterday at 63.3 USc which is actually a six week high. Against the Australian dollar we are also marginally firmer at 90.2 AUc. Against the euro we are a tad firmer too at 61.7 euro cents. That all means our TWI-5 starts today at 71.3.
The bitcoin price has moved lower from this time yesterday, down -3.3% to US$22,950. Volatility over the past 24 hours has been moderate at just over +/-2.8%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».