Here's our summary of key economic events overnight that affect New Zealand, with news global food prices are falling, led by dairy.
But first up, the Americans reported that their household net worth rose to a record US$154 tln in Q2-2023, a rise of +4.8% in a year. They managed that because their household liabilities only rose +3.6% in the same period. Helping is the surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than expected.
US consumer credit rose a modest +US$10.4 bln in July, a second month with a solid but unspectacular rise. Household debt isn't an overall problem for them.
Meanwhile, under-scrutiny American regional banks saw their profits and deposits broadly steady in Q2-2023, suggesting the turmoil earlier in the year has eased considerably. But a regulator watch is still on for unrealised losses, especially around commercial property loans.
The Canadian economy added almost +40,000 new jobs in August, far exceeding market expectations of a +15,000 increase. Full-time work rose +32,000 and part-time jobs increased by +8,000 in the month from July. But there were some notable distortions. The number of self employed rose by +50,000. And the overall population rose +103,000 in the month. That meant that their jobless rate stayed at a relatively high 5.5%. Those in jobs saw their pay rise +5.5% from a year ago, and well above their inflation rate of +3.3%.
The Japanese economy expanded +1.2% in Q2-2023 from the prior quarter, compared with a flash reading of a +1.5% gain and after a downwardly revised +0.9% rise in Q1. This was the second straight quarter of growth, coming slightly less than market forecasts of a +1.3% rise, and despite being the fastest growth for a year, it was downgraded because of weaker-than-expected household consumption, and investment. Year-on-year, the Japanese economy was +2.0% larger. although the Q2-2023 grew at an annualised +4.8% rate, so relatively fast recently. Just not as fast as earlier indicated.
All eyes will be on the CPI and PPI inflation rates coming out of China later today (Saturday). Markets expect to see CPI at just +0.2% from a year ago, and producer prices fall -3% on the same basis. At these levels, that would be a moderation of the deflationary forces we reported for July.
Meanwhile car sales in China, especially of EVs, returned to growth in August.
'Rights' wise, things are getting even tougher in China. They are moving to criminalise "hurting the feelings" of Chinese people in a new 'legal' move. Who decides that? The CCP of course.
Meanwhile, global food prices fell -2.1% in August to now be at their lowest since April 2021. These prices are now -25% below their peak in March 2022. A key reason for the latest fall is the retreating dairy price which was down -4% as the world seem to have a dairy surplus now. Meat prices are falling too, related to the fall in grain feed prices.
The UST 10yr yield starts today down -1 bp at 4.26%. That is a weekly change of +8 bps. Their key 2-10 yield curve is more inverted at -73 bps. And their 1-5 curve is now at -103 bps. Their 3 mth-10yr curve inversion is also more inverted at -114 bps. The Australian 10 year bond yield is now at 4.12% and down -1 bp from yesterday. The China 10 year bond rate is little-changed at 2.68%. And the NZ Government 10 year bond rate is now at 5.00% and -5 bps lower. A week ago it was 4.89%.
Wall Street is little-changed in their Friday session, heading for a -1.7% weekly retreat. Overnight European markets were up about +0.5%. Yesterday, Tokyo ended its Friday session down -1.2% for a weekly loss of -0.6%. Hong Kong didn't trade yesterday because of the typhoon there and ended its week down -2.1%. Shanghai fell -0.2% to end the week down -0.9%. The ASX200 ended its Friday session down -0.2% and was down -0.7% for the week. The NZX50 was down -0.7% on Friday and down -1.6% for the week.
The price of gold will start today at just on US$1920/oz and up +US$2 from yesterday. But that is down -US$21 from a week ago.
And oil prices are up +50 USc from yesterday at just on US$87/bbl in the US. The international Brent price is now Up +US$1 at just over US$90.50/bbl. A week ago these prices were US$85.50 and US$88.50, so +US$2/bbl rises (+2.3%) from there.
In Australia, strike action at natural gas facilities in WA, responsible for about 6% of the world’s supply of that fuel, came as talks over pay and work conditions failed.
The Kiwi dollar starts today little-changed from yesterday at 58.9 USc. A week ago it was 59.4 USc, so a net -0.8% devaluation in that period. Against the Aussie we are back up +¼c at 92.4 AUc. Against the euro we are unchanged at 55 euro cents. That all means the TWI-5 has edged up by +10 bps to 68.5. A week ago it was at 68.7.
The bitcoin price is again little-changed from this time yesterday, and is now at US$25,820, a net fall of just -0.4% in a day. Over the past week, the net rise is only +0.8%. Volatility over the past 24 hours has been modest at just on +/-1.5%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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