Here's our summary of key economic events overnight that affect New Zealand, with news some policymakers are doubling down on their goals, while others are wavering.
But first in the US, the Dallas Fed factory survey fell as new orders retreated. Price growth eased while wage growth remained elevated. But their negative sentiment eased somewhat and future production indicators improved a lot.
But despite these clear signs American economic expansion has topped out, Fed officials are not easing up on their inflation-fighting rhetoric. Influential New York Fed President Williams said policymakers have more work to do to curb inflation, which remains “far too high” despite some recent improvement in supply chain challenges. “Further tightening of monetary policy should help restore balance between demand and supply and bring inflation back to 2% over the next few years,” he noted. His predecessor is also calling for holding the policy line. Both of them seem to suspect Powell may be vulnerable to pressure to ease present policy.
In China, officials there are also toughening it out; police were out in force to discourage protest gatherings in Beijing, Shanghai and Hong Kong. This comes as state-media doubled down on Beijing’s zero-tolerance approach to the pandemic, even as their own public health experts urge a rethink.
Hong Kong exports retreated again to be more than -10% lower than year-ago levels. That is six consecutive months of retreat.
In Taiwan, consumer sentiment dropped to a 13 year low in November as lower global trade and the geopolitical squeeze bites into family finances there. It is telling that sentiment is well below pandemic levels.
In Australia, retail sales unexpectedly dipped by -0.2% in October from September when a +0.5% rise was expected on top of a +0.6% gain in September. This was the first drop in retail trade since December 2021, and comes amid cost of living pressures and rising interest rates. Department stores had the largest fall, down -2.4% in a month. Overall, year-on-year the rise eased to +12.5%. In November, some major retailers are reporting strong trading conditions.
And tomorrow, Australia will release its October CPI data and that is expected to rise to +7.5%, keeping pressure on the RBA which is showing signs of wavering commitments to fighting inflation.
And we should note that the price of rice is rising, now back approaching a two-year high which was an all-time record high. Demand is rising, supply is falling especially from the US, and some key countries (like India) are restricting exports. Stocks in some large consumer countries are falling. The recent pullback of high global food prices may have only been temporary.
The UST 10yr yield starts today at 3.71% and up +2 bps. The UST 2-10 rate curve is little-changed at -76 bps. And their 1-5 curve has stayed inverted at -88 bps and their 30 day-10yr curve is still inverted and unchanged at -34 bps. The Australian ten year bond is down -2 bps at 3.58%. The China Govt ten year bond is up +3 bps at 2.88% and a five month high. And the New Zealand Govt ten year will start today down -9 bps at 4.07%.
Wall Street has opened lower its week lower, with the S&P500 down -1.1% in Monday trade. Overnight European markets all closed lower too, but in a range of -0.1% in London to -1.1% in Frankfurt. Yesterday, Tokyo ended down -0.4%. Hong Kong fell a sharpish -1.6% and Shanghai was down -0.8%. The ASX200 ended its Monday session down -0.4%, and the NZX50 ended down -0.7%.
The price of gold will open today down -US$10 at US$1745/oz.
And oil prices start today up +50 USc from this time yesterday at just on US$77/bbl in the US while the international Brent price is just over US$84/bbl. But these levels are a recovery from a intra-day dip.
The Kiwi dollar will open today at 62 USc, and down -½c from this time yesterday. Against the Australian dollar we are little-changed at 92.7 AUc. Against the euro we are soft at 59.8 euro cents. That all means our TWI-5 starts today at 70.9 and down -40 bps from this time yesterday.
The bitcoin price is now at US$16,177 and down -2.2% from this time yesterday. Another large crypto platform has filed for bankruptcy protection. Volatility over the past 24 hours has modest at just +/- 1.8%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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