Here's our summary of key economic events overnight that affect New Zealand, with news financial markets have ended the week nursing some big losses.
But first, the inflation measure the US central bank takes note of, the PCE, slipped in August from July to be +6.2% higher than a year ago. But the "core" result rose slightly to 4.9% and "stubbornly high". Personal income rose again at the expected rate, but personal spending rose faster than expected.
Overall American grain stocks are holding up and came in very much as expected and larger than a year ago. But corn stocks were lower than expected and that juiced its price today. Soybean stocks were high and its price has fallen sharply today. Both were outsized moves that will have global impacts.
The latest University of Michigan consumer sentiment survey has stayed very low, even if it did rise marginally from July.
New official data shows that last week, Japan's government spent about NZ$34 bln intervening in the foreign exchange market last week to prop up the yen, draining nearly 15% of funds it has readily available for these types of interventions (so they have about NZ$225 bln left in these reserves).
Japanese industrial production surged unexpectedly in August to be +5.1% higher than a year ago, its best non-pandemic result since 2014.
Meanwhile Japanese retail sales rose by +4.1% in August from a year ago, exceeding market consensus of +2.8% and following a +2.4% gain a month earlier.
In China, there were PMIs released late yesterday. The official factory PMI reports a very slight improvement to a steady state (neither expanding not contracting). But the private Caixin version has it going the other way, a growing contraction.
The official release also included data on their services sector and that was negative, falling from a modest expansion in July to no expansion in August. That is the third straight month of a decrease in their services expansion.
Hong Kong retail sales were reported for August too, and they weren't flash, falling -2.9% year-on-year.
And staying in Hong Kong, Bloomberg is reporting that the value of Chinese firms listed there has sunk -14% to their lowest valuation on record. They are now trading at just 60% of their book value, the cheapest ever.
India reviewed its policy interest rate late yesterday and as expected it raised it by +50 bps to 4.9%.
German reported that its labour force didn't grow in August, the first time in 18 months that that has happened. They also said the numbers out of work fell by -125,000 and their jobless rate stayed at 3.0%.
Meanwhile the EU said its overall inflation rate rose to +10.0% in September. German inflation was higher at +10.9% whereas French inflation was at 6.2% which was about the lowest of the larger countries in the block.
European Union countries agreed to impose emergency taxes on energy firms' windfall profits, and began talks on their next move to tackle Europe's energy crunch - possibly a bloc-wide oil and gas price cap.
More globally, according to Dealogic data, global M&A fell for the third consecutive quarter in Q3-2022 as rising interest rates forced lenders to pull back from financing large deals and the soaring American dollar failed to spur US companies into snapping up foreign targets.
In Australia, their Productivity Commission is reminding policymakers that first home buyer subsidies push up housing values is counter-productive and doesn't make home ownership more affordable. "This money would be better spent preventing homelessness", they say.
The UST 10yr yield starts today at 3.83% and +6 bp higher than this time yesterday in a late surge. A week ago it was at 3.70%. The UST 2-10 rate curve is less inverted at -41 bps. But their 1-5 curve is totally flat. And their 30 day-10yr curve is less positive +102 bps. The Australian ten year bond is lower, down -6 bps at 3.89%. The China Govt ten year bond is unchanged at 2.77% and a two month high. The New Zealand Govt ten year will start today at 4.32%, up +10 bps and up +16 bps in a week.
Wall Street is down again today in its Friday session, with the S&P500 down -0.9% in late trade and slipping to a -2.1% a loss for the week. Overnight European markets all posted gains of about +1.2% except London which was up only +0.2%. London ended -1.8% lower for the week. Frankfurt ended almost -1.0% lower. And Paris ended its week +0.3% higher. Yesterday Tokyo ended down -1.8% for a weekly loss of -3.2%. Hong Kong rose +0.3% yesterday to end the week -3.1% lower, and Shanghai ended its Friday session down -0.6% to book a -1.4% weekly retreat. The ASX200 ended its Friday session down -1.2% and down -1.5% for the week, while the NZX50 also fell -1.2% yesterday to drop -3.9% for the week in a tough environment.
The price of gold will open today at US$1662/oz. This is up +US$3 from this time yesterday and up +US$20 from this time last week.
And oil prices start today -US$2.50 USc lower at just over US$79.50/bbl in the US while the international Brent price has risen to be just under US$85.50/bbl. These levels are similar to where we were at last week and eight month lows. Natural gas prices are still falling.
The Kiwi dollar will open today at just under 56 USc more than -1c lower than this time yesterday and back to a 13 year low (pandemic excepted). Against the Australian dollar we are unchanged at 87.7 AUc. Against the euro we more than -¾c lower 57.5 euro cents. That all means our TWI-5 starts today at just 66.3, and down -100 bps in a day and -160 bps in a week. That is an 11 year low (also pandemic excepted).
The bitcoin price is now at US$19,786 and up +1.6% from this time yesterday and up +5.5% from this time last week. Volatility over the past 24 hours has been moderate at just on +/- 2.7%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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