US leading indicators weak but equity markets ignore those signals; EU sentiment improves; Aussie leading indicators up; copper prices rise; UST 10yr 3.53%; gold dips and oil firm; NZ$1 = 64.8 USc; TWI-5 = 71.7

Here's our summary of key economic events overnight that affect New Zealand, with news that features measurements of sentiment that rounded out 2022.

And because most were either improving, or not as bad as expected, equity markets have responded with some solid gains. They certainly don't seem to be pricing in weakening data. And bond markets gave signals they are accepting central banks will need to keep hiking to get on top of inflation.

In the US, the Conference Board Leading Index came in down -1% for December, mirroring its November weakness. The declines were widespread, indicating deteriorating conditions in the months ahead for labour markets, manufacturing, housing construction, and financial markets. Meanwhile, the coincident economic index (CEI) has not weakened in the same fashion as the Leading Index because labour market related indicators (employment and personal income) remain strong. Still, these surveyors say the US is heading for recession in 2023.

Although it remains in deep negative territory (normal for them), the EU's survey of consumer sentiment continued its rather quick improvement in December and well off its war-induced lows from mid 2022.

In an interview in Holland, an ECB member said the central bank will raise rates by +50 bps in both February and March and will continue to raise them further in the months after because "it's clear we are not there yet". The current ECB rate is 2.50%. This comes as some in the US reckon the US Fed will tone down its rate-hiking path.

In Canada, they are getting ready for a +25 bps rate rise on Thursday, taking their policy rate to 4.5%.

In Australia, the Conference Board data tracking shows rising leading and concurrent indicators, so no indications of an imminent recession there.

And perhaps we should note that copper prices continue to rise, not only on expectations that China will return from holiday in an expansive mood, but also from a major mine closure in Peru due to widespread civil unrest.

And staying in South America, an idea that has been around since at least 1987 has resurfaced with an easing of tensions following the Brazilian election, Brazil and Argentina have agreed to 'study' the merging of their two separate currencies. Both will find it difficult, but both want to rely less on the US dollar.

The UST 10yr yield starts today at 3.53%, and up +5 bps from this time yesterday. The UST 2-10 rate curve is still inverted at -70 bps and little-changed. And their 1-5 curve is much less inverted at -108 bps. Their 30 day-10yr curve is also less inverted at -103 bps. The Australian ten year bond is up +2 bps at 3.49%. The China Govt ten year bond is unchanged at 2.96%. And the New Zealand Govt ten year is starting today at 4.11% and up +6 bps.

Wall Street has started its week on a 'positive' note with the S&P500 up +1.5% in late Monday trade. Overnight, European markets were all up more than +0.5% except London which barely managed +0.1%. Yesterday, Tokyo ended up +1.3% in its Monday trade. Of course both Hong Kong and Shanghai are closed for holidays. The ASX200 ended essentially unchanged and the NZX50 shed a minor -0.2% yesterday.

The price of gold will open today at US$1923/oz and down -US$3 from this time yesterday.

And oil prices start today +50 USc firmer, at just over US$82/bbl in the US while the international Brent price is up a bit more to just over US$88.50/bbl.

The Kiwi dollar has eased slightly overnight, now at 64.8 USc. Against the Australian dollar we start today down -¾c at 92.2 AUc. Against the euro we are unchanged again at 59.6 euro cents. That all means our TWI-5 starts today at 71.7, and little-changed from yesterday.

The bitcoin price is marginally higher, now at US$22,909 and up a mere +0.3% from this time yesterday. Volatility over the past 24 hours however has been modest at +/- 1.8%.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».