Here's our summary of key economic events overnight that affect New Zealand, with news the endless talk of a looming global recession seems to be just that, talk.
Retail sales in the US on a same-store basis were surprisingly firm last week, up more than +10% from year-ago levels. And while much of this will be inflation's effect, clearly not all, and there is real volume growth in these numbers. Wall Street is sanguine about the prospects of many big retailers too. There is a clear push to reduce inventories, which will help investor sentiment in this sector.
However, the latest consumer sentiment survey, this one from the Conference Board, sees levels slipping, and while they moving away from robust levels, they are now falling but these are just off mid-year highs. Prices are driving the sentiment and while there is an expectation a recession is ahead, they are clearly not there yet.
The Dallas Fed services index is still positive, but is is less so in November than October.
The Canadian economy expanded +0.7% in Q3 2022 from the previous quarter, a fifth consecutive quarter of growth, and taking the year-on-year expansion to +3.9% real which is reasonably impressive. Growth in exports, non-residential structures, and business investment in inventories were moderated by declines in housing investment and household spending. Exports increased +2.1%. This overall faster growth probably raises the chances of faster interest rate hikes there.
Retail sales in Japan barely rose in October from September to be up +4.3% from a year ago. This was less than analysts were expecting, a softness that is proving hard to shake.
In China, reprisals for daring to demonstrate over the past few days are building. Chinese police have begun leveraging the powers of the country’s surveillance state to go after those who participated in rare public displays of defiance over the government’s stringent Covid control policies. Reporters who covered the protests have been beaten up by police.
Consumer prices in Germany rose +10.0% in November from year-ago levels and that was less than the rise in October and lower than was expected. (On an EU-harmonised basis it was up +11.3% and also less than expected.) The surprise was that from October, November prices fell -0.5%. Perhaps this is the top for them? This latest relief is mostly to do with energy costs.
Some of this is coming through in the wider tracking of sentiment in the EU. While business sentiment worsened, the same was not the case for consumers, who actually can see the end of the severe price pressures in their inflation expectations for a year ahead. In these surveys, both investment expectations, and employment levels remain much better than you might expect given the seasonal and war pressures.
The UST 10yr yield starts today at 3.73% and up +2 bps. The UST 2-10 rate curve is little-changed again at -74 bps. And their 1-5 curve has stayed inverted at -85 bps even if a bit less, and their 30 day-10yr curve is still inverted and also a bit less at -29 bps. The Australian ten year bond is up +5 bps at 3.63%. The China Govt ten year bond is up another +4 bps at 2.92% and a new 14month high. And the New Zealand Govt ten year will start today up +5 bps at 4.12%.
Wall Street has opened its Tuesday session lower, with the S&P500 down -0.4%. Overnight European markets all closed mixed with Frankfurt down -0.2% but London up +0.5%. Yesterday, Tokyo ended down -0.5%. Hong Kong zoomed higher up +5.2% and Shanghai was up strongly too, up +2.3% both with late surges. The ASX200 ended its Tuesday session up +0.3%, and the NZX50 ended up +0.8%.
The price of gold will open today up +US$6 at US$1751/oz.
And oil prices start today up +US$1.50 from this time yesterday at just on US$78.50/bbl in the US while the international Brent price is up much less at just over US$84.50/bbl.
The Kiwi dollar will open today at 62 USc, and unchanged from this time yesterday. Against the Australian dollar we are little-changed at 92.6 AUc. Against the euro we are holding at 59.9 euro cents. That all means our TWI-5 starts today at 70.9 and little-changed from this time yesterday.
The bitcoin price is now at US$16,404 and up +1.4% from this time yesterday. Volatility over the past 24 hours has modest at just +/- 1.3%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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