Here's our summary of key economic events overnight that affect New Zealand, with news the fight against inflation comes at a time economic activity is wobbling.
Overnight there was a bit of central bank action, with widely varying approaches. Firstly Turkey is going all-in on ignoring inflation's threat and it slashed its policy rate by -150 bps to 9% on orders of their President. Inflation is running at 85% pa, the Turkish lira slumped and is now at a record 18.6 to the USD, and their current account deficit is now running at -6.5% of GDP.
But still fighting inflation are the Swedes. Their central bank hiked by +75 bps overnight, taking their policy rate to 2.5% and its highest since 2008. They are facing 9.3% inflation and are another targeting 2%.
Chiming in was the South African central bank. They hiked by +75 bps too overnight in a split decision, taking their policy rate to 7%. They are facing inflation of 7.6%.
Meanwhile, the ECB released the minutes of its October meeting where they raised their poliy rate by +75 bps in the face of high and rising inflation. Those minutes made the case to 'normalising' monetary conditions by starting the unwind of QE, but the economic situation clearly makes that path a disputed one.
And the US Federal Reserve also released the minutes of its earlier November policy meeting when they also raised rates by +75 bps.
The US is shutdown for its annual Thanksgiving holiday, arguably as big a family reunion period than Christmas. It involves outsized travel activity, and is a respite day before the Black Friday sales kick off tomorrow which will take the important holiday shopping season through to Christmas. Analysts suspect this 2022 period will be a relatively lackluster affair - the usual hype but restrained consumer activity. Its a global economic engine that may not fire on all cylinders this year.
In China, the pandemic spread is accelerating and authorities there are scrambling to respond. They face a population weary of harsh restrictions, but their reality is that their healthcare system won't cope with the settings their people long for when they watch how the rest of the world is living with it. Hopes of an economic rebound in China are now all tied up in how they navigate this latest pandemic challenge because now more than 20% of the country's GDP regions are now under some sort of lockdown.
In Japan, their services PMI slipped from a good expansion in October to neither expanding for contracting in November, so holding its own. Their factory sector slipped to a small contraction, their first since 2021.
In Malaysia, they have a new Prime Minister in Anwar Ibrahim, who has faced a very rock journey to get here. He leads a tenuous minority government.
Confirming the earlier ZEW survey for consumers, the IFO business sentiment survey in Germany also reported an improved mood in the country. To be fair it is still very negative, but now less so, the "highest" in three months and above what analysts were expecting.
In Australia, heavyweight retailer Harvey Norman says end of year holiday sales are set up for a strong finish.
Container freight rates fell by another -7% last week, a heady rate of fall that is being maintained as global trade volumes pull back, especially from China. Rates from China to Europe are in freefall. Bulk rates were little-changed however.
The UST 10yr yield starts today at 3.69% and down another -5 bps from yesterday. The UST 2-10 rate curve is little-changed at -78 bps. And their 1-5 curve is a bit more inverted at -87 bps. And their 30 day-10yr curve is also marginally more inverted at -16 bps. The Australian ten year bond is down -10 bps at 3.52%. The China Govt ten year bond is down -3 bps at 2.81%. And the New Zealand Govt ten year will start today down -9 bps at 4.17%.
Wall Street is on holiday today but will be doing a half-day session tomorrow. Overnight, European markets all ended more than +0.5% higher, except London which had no gain. Yesterday Tokyo ended its Wednesday session up +1.0%, Hong Kong also ended up +0.8% but Shanghai ended down -0.3% The ASX200 was little-changed, up merely +0.1%, and the NZX50 posted flat result in the end with a late-session recovery.
The price of gold will open today up +US$15 at US$1757/oz.
And oil prices start today little-changed from this time yesterday at just under US$78/bbl in the US while the international Brent price is just under US$85/bbl.
The Kiwi dollar will open today at 62.7 USc, up almost +/-½c. Against the Australian dollar we are little-changed at 92.6 AUc. Against the euro we are firm at 60.2 euro cents. That all means our TWI-5 starts today at 71.3 and up another +20 bps.
The bitcoin price is now at US$16,595 and up +1.3% from this time yesterday. Volatility over the past 24 hours has remained modest at +/- 1.4%.
Again, there will be no video or podcast versions today due to Covid.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.