Here's our summary of key economic events overnight that affect New Zealand, with news China has taken more action to juice up its liquidity situation.
But first, the Americans have finished their Thanksgiving Day holiday, and are turning their attention to shopping. It looks like the huge Black Friday retail event won't have quite the impact it once did, but it will still be important and markets will react to retailer sales reports. Early indications are not auspicious.
As we forecast a few days ago, China has pulled the trigger on lowering its bank reserve ratio requirements (RRR) by -25 bps, effective from December 5th, releasing around CNY ¥½ tln in long-term liquidity (NZ$110 bln) in an attempt to boost economic activity. It follows a similar move in April. The RRR for big banks now stands at 11%, the lowest since mid-2007 while the weighted average ratio for financial institutions stands at 7.8%. Authorities also said they aim to "keep liquidity reasonably ample".
Singapore saw its industrial production rise in October from September, and by more than expected, but that wasn't enough to avoid a year-on-year dip.
Still somewhat confounding expectations, Germany reported an improved economic expansion on their September quarter than earlier estimated. Consumer sentiment has stopped falling too, but it remains very weak. French consumer confidence improved too, but it is also very weak.
And Spain is pushing ahead with new wealth taxes and new taxes on banks and energy companies, although it is now clear that the amount they expect to raise is much less than earlier indicated, especially on energy companies.
In Australia, voters in Victoria are going to the polls today to elect a State Government. It is expected to be a close race. The Murdoch press has been going hard against Premier Daniel Andrews with some pretty wild accusations.
The UST 10yr yield starts today at 3.69% and unchanged from yesterday but down -11 bps from one week ago. The UST 2-10 rate curve is little-changed at -78 bps. And their 1-5 curve has stayed inverted at -87 bps. but their 30 day-10yr curve is much more inverted at -34 bps. The Australian ten year bond is up +8 bps at 3.60%. The China Govt ten year bond is up +4 bps at 2.85%. But the New Zealand Govt ten year will start today little-changed at 4.16%. A week ago it was at 4.22%.
Wall Street did a half-day session today and the S&P500 was little-changed to end the week up +1.5%. Overnight, European markets all ended little-changed too on very light volumes. Yesterday Tokyo ended its Friday session down -0.4% for a weekly gain of +1.0%. Hong Kong ended down -0.5% and a similar weekly loss. Shanghai ended up +0.4% for a weekly gain of +0.8%. The ASX200 was up +0.2% on Friday to cap their week with a +1.5% gain. The NZX50 posted a flat weekly result after a Friday gain of +0.5%.
The NZX50's unchanged weekly result holds on to a +2.2% gain over the past month. For the week, F&P Healthcare (FPH, #1) rose +0.8% and Tourism Holdings (THL, #38) rose +4.3%. But a few good rises were more than offset by some sharpish falls by many minnows. Among the worst were the -7.8% fall by troubled Eroad (ERD, #50) and the -10.1% weekly fall by Ryman (RYM, #13). In fact the whole retirement/rest home sector is taking a real battering, down -7.9% for the week overall, down -12.5% for the month, and giving up a huge -37% over the past year. That is a loss of capitalisation for this sector of -$3.7 bln in a year. They have gone from a hero sector to zero rather quickly. Heavy spending on TV advertising can't hide the vulnerabilities to the real estate market, staffing issues, and an overbuilt situation.
The price of gold will open today down -US$4 at US$1753/oz. This almost exactly the same as a week ago.
And oil prices start today down -US$1 from this time yesterday at just under US$77/bbl in the US while the international Brent price is just on US$84/bbl. These levels are -US$2 lower than a week ago.
The Kiwi dollar will open today at 62.4 USc, up almost +1c since this time last week. Against the Australian dollar we are little-changed at 92.5 AUc. Against the euro we are still firm at 60 euro cents. That all means our TWI-5 starts today at 71.2 and up +60 bps from this time last week.
The bitcoin price is now at US$16,496 and down -0.6% from this time yesterday and down a mere -0.4% from this time last week. Volatility over the past 24 hours has low at +/- 0.8%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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