Here's our summary of key economic events overnight that affect New Zealand, with news markets are looking forward positively today, putting behind a Q3 that had its issues.
First however, later today the RBA will advise its latest rate review and tomorrow the RBNZ will do the same. That means there is a pre-release shadow over local interest rate markets ahead of those announcements. Both central banks are expected to add +50 bps to their policy rates although that is less certain for Australia.
Meanwhile, markets are more chipper today with the end of the quarter behind it. Equity markets have opened Q4 in a positive mood. Perhaps strong progress by Ukraine in defending itself is helping. However the data coming through for Q3 isn't so bullish.
In the US, the widely-watched ISM factory PMI sagged much more than expected to be barely expanding. New orders, including new export orders were the weak spot. Labour is still tight however, although price pressures are easing quickly.
There was also the internationally-benchmarked Markit PMI for the US out as well, the final September version, and that was more upbeat recording a stable expansion. In this one, production and new orders rose, albeit only marginally, input cost inflation eased further as some inputs fell in price, and employment growth was the fastest since March.
This one ties into a global set which is much less impressive with business optimism sinking to a 28-month low.
In Japan, they are still expanding but the trend is down with new orders and output falling.
We already reported that China's factory sector was shrinking in September. And now we can add that Taiwan is going backwards too with output and sales falling at their quickest rates since May 2020.
In India, their expansion continues at a good, healthy pace.
In Europe, their manufacturing sector downturn accelerated in September as demand tumbled further and price pressures intensified.
Social media is making a mess of globally systemic banking giant Credit Suisse's reputation, suggesting it is about to be the 2022 equivalent of Lehman Bros. The real fear is that rumours might become self-fulfilling. Those fears were given credence by their CEO who wrote a staff memo saying the bank was at a "critical moment" which fed the rumour mill. But it appears he was 'only' referring to a major organisational shakeup within the bank.
In Brazil, a presidential runoff election is the outcome of the weekend vote. That runoff election will be held on October 30. The tightness of the first-round election result came as a surprise, since pre-election polls had given the leftist candidate a commanding lead over the incumbent. But leftist ex-president da Silva received 'only' 48% of the vote, versus 44% for far-right Bolsonaro, with 97% of the ballots counted. da Silva needed 50% to win on the first ballot.
The UST 10yr yield starts today at 3.65% and down -18 bps from this time yesterday. The UST 2-10 rate curve is unchanged at -45 bps. But their 1-5 curve is back inverted at -12 bps. And their 30 day-10yr curve is much less positive at +88 bps. The Australian ten year bond is -11 bps flatter at 3.80%. The China Govt ten year bond is unchanged at 2.77% and may stay like that while they are on holiday. The New Zealand Govt ten year will start today at 4.30%, down -2 bps, but may well fall later in the day in response to the Wall Street shift.
On Wall Street, the S&P500 is up strongly in a risk-on mood. It is up +2.2% in late Monday trade there. Overnight, European markets were generally firmer led by Frankfurt's +0.8% and trailed by London's +0.2%. Yesterday Tokyo ended its Monday session up +1.1%. Hong Kong fell -0.8%. Shanghai was closed for their Golden Week holiday. The ASX200 ended down -0.3% and the NZX50 ended down almost -1.0%.
The price of gold will open today at US$1692/oz. This is up +US$31 from this time yesterday.
And oil prices start today up +US$3.50 from yesterday at just under US$83/bbl in the US while the international Brent price has risen to be just over US$88.50/bbl.
The Kiwi dollar will open today at 57.1 USc more than +1c higher than where we that this time yesterday. Against the Australian dollar we are little-changed at 87.8 AUc. Against the euro we are up +¾c at 58.3 euro cents. That all means our TWI-5 starts today at 67.3, and up +100 bps since this time yesterday morning.
The bitcoin price is now at US$19,470 and up +1.4% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.5%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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