Here's our summary of key economic events overnight that affect New Zealand, with news supply is rising and demand is shifting away for energy intensity and efficiency reasons, so oil prices are falling.
Crude oil prices are falling quite sharply today because the latest US EIA data showed a surge of over +12 mln barrels in American crude oil stocks last week, far higher than the +2.5 mln anticipated. Their economy is expanding in a way that doesn't need as much petroleum and high global supplies have pushed prices down to record lows on an inflation-adjusted basis. Neither Russia's war nor the Middle-East tensions - nor an expanding global economy - are keeping this price elevated.
US mortgage applications fell -2.3% last week from the week before, ending the recent and short run of expansions when four of the past six weeks had recorded gains. These levels are -12% lower than a year-ago.
Meanwhile, final revisions for American PPI has them falling slightly more than originally estimated for December from November to be only +1.0% higher than a year ago. The January data will be released on Saturday (NZT).
In Canada, analysts there now expect their central bank to end its quantitative tightening program much sooner than originally indicated, maybe as soon as April.
The EU reported that their industrial production took something of a surge in December, expanding +2.6% (real), to enable it to be +1.2% higher (real) than in the same month a year ago. It was an unexpected bit of good news from them. They weren't able to report any 2023 expansion in economic activity (GDP), calling it "stable". But at least it wasn't a decline. They benchmark themselves against the US, and apart from the pandemic, the gap they suffer now is as wide as it was in the GFC.
Staying in the region the UK reported its CPI inflation at 4.0% and core inflation at 5.1%, both unchanged levels in January than December.
In Indonesia, former general Prabowo is projected to win Indonesia's election on the first round of voting. At first sight, it appears to be a turning away by Indonesia from China to a more Western-friendly stance. But first-looks can sometimes be deceiving in Indonesia.
The UST 10yr yield starts today at 4.25% and -4 bps lower. The key 2-10 yield curve inversion is a little shallower at -31 bps. Their 1-5 curve inversion is still at -72 bps. And their 3 mth-10yr curve inversion is little-changed at -111 bps. The Australian 10 year bond yield is now at 4.23% and down -4 bps from yesterday. The China 10 year bond rate is unchanged at 2.45% while they are on holiday. The NZ Government 10 year bond rate is up +8 bps at 5.00%.
In Wall Street's Wednesday trading session, the S&P500 is little-changed and now well off its all-time high on Monday, -1.7% from then. Overnight European markets all rose about +0.5%. Yesterday Tokyo ended its Wednesday session down -0.7%, Hong Kong ended up +0.8% after a rocky start. Shanghai remains closed. Singapore was down a minor -0.1%. The ASX200 closed its Wednesday trade down -0.7% and the NZX50 again matched that.
The price of gold will start today down -US$2/oz from yesterday at US$1991/oz.
Oil prices are down -US$1 at just over US$76.50/bbl in the US while the international Brent price is now just under US$81.50/bbl. However, prices are still falling as we report this.
The Kiwi dollar starts today at just under 60.9 USc and recovering about +¼c from this time yesterday. Against the Aussie we are little-changed at 93.8 AUc. Against the euro we open higher at just over 57.7 euro cents. That all means our TWI-5 starts today at just on 70.5 and up +20 bps.
The bitcoin price starts today at US$51,699 and up a very strong +6.6% from this time yesterday. Volatility over the past 24 hours has been high at just under +/- 3.8%.
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