Here's our summary of key economic events overnight that affect New Zealand, with news markets are pricing much lower yields for NZ Government bonds, partly in response to international market shifts.
But first, the turn in US economic fortunes still hasn't shown up in their weekly jobless claims data. They came in low last week and lower than expected. There are now 1.9 mln people on these benefits.
But weaker conditions are showing up in more factory data. However the Fed's monthly Beige Book surveys came in less negative than expected, noting "moderate to modest" expansions across the country, in their labour markets, and for prices.
The Philadelphia Fed's updated survey stayed slightly negative in January, although less so than for the prior month.
American building consent and housing start data were both slightly lower in December, but not significantly so. Essentially they are both settling out at pre-pandemic levels.
The latest data on long term investment flows in and out of the US shows larger inflows than were expected in December, and for the year.
It is tough being a bear on the US economy.
But you are being helped by Republicans in Congress who are refusing to pass a budget resolution. The US Treasury has started its 'extraordinary measures' to keep the US Federal Government from defaulting on its payments. Those are likely to drag on for many months yet in response to their pathetic game of chicken.
In Japan, exports rose more than expected in December, and imports rose less than expected. But they still ran a record high trade deficit, which is an historically unusual position for them.
The ECB says inflation in Europe is still way too high. They signaled they are determined to push rates into restrictive territory “for long enough” to return inflation to their 2% target.
In Australia, consumer inflation expectations in rose to 5.6% this month from 5.2% in December, though a general moderation in expectations has been evident in recent months as consumers appear to be responding to higher interest rates, according to the Melbourne Institute who do this survey.
And staying in Australia, the December labour market data was a minor disappointment - mainly because November data was revised lower. Full time employment rose +17,000 when +34,000 was expected. Part-time positions retreated -32,000 when they were expected to expand +25,000. Most analysts seem to think the December hesitation is a 'one-off'.
We should also possibly note that the verdict is in; fake meat has been just another fad, and won't 'save the world'. Consumers are wary of highly processed, chemically altered foods.
Container shipping costs were virtually unchanged last week, although bulk cargo freight rates continued their sharp falls and are back at or below their long term averages, which given inflation, makes them very cheap again.
The UST 10yr yield starts today at 3.42%, and up +3 bps from yesterday. The UST 2-10 rate curve is still inverted at -71 bps. And their 1-5 curve is still inverted at -119 bps. Their 30 day-10yr curve is still inverted at -104 bps. The Australian ten year bond is down -2 bps to 3.43%. The China Govt ten year bond is down -1 bp at 2.95%. And the New Zealand Govt ten year is starting today at 3.99% and down a sharp -15 bps.
We perhaps should note that market pricing now favours a +50 bps OCR hike on February 22 by the RBNZ, shifting down from the prior +75 bps bet.
Wall Street has started its Thursday session with the S&P500 down -0.5% in late trade. Overnight, European markets were all down about -1.7%. Yesterday Tokyo closed down -1.4%. Hong Kong ended down -0.1% and Shanghai closed up +0.5%. The ASX200 ended its Thursday session up 0.6%, and the NZX50 ended lower, down -0.3%.
The price of gold will open today at US$1921/oz and up +US$15.
And oil prices start today little-changed at just over US$81/bbl in the US while the international Brent price is just over US$86.50/bbl.
The Kiwi dollar has softened overnight, now at 63.9 USc and down -½c. Against the Australian dollar we are little-changed at 92.5 AUc. Against the euro we are down -¾c at 59 euro cents. That all means our TWI-5 starts today at 71, and down -50 bps since this time yesterday.
The bitcoin price is stable now at US$20,939 and virtually unchanged from this time yesterday. Volatility over the past 24 hours has been low at +/- 0.9%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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