US new home sales slip; UST auction yields rise but demand stays strong; China gives mixed messages; Aussie CBD office valuations keep sinking; UST 10yr 4.30%; gold slips again while oil holds; NZ$1 = 61.7 USc; TWI-5 = 71.1

Here's our summary of key economic events overnight that affect New Zealand, with news ahead of tomorrow's closely-watched RBNZ OCR decision.

First in the US, new home sales rose but by less than expected. The tame result continues a now-long trend of sales levels that are not really growing. Of concern in this market is that they now have over eight months of unsold supply at the current sales rate. 'High mortgage rates' are getting the blame.

The February update to the Dallas Fed factory survey in America's oil patch turned from being negative to positive, both on the activity index and the outlook index. But both levels remain below their long term levels. A brighter new order level turned this around.

Another very well-supported UST 2yr Note auction brought rising yields, now at 4.64% pa (median) which was up from 4.31% a month ago. Yields on the well-supported 5 year Note were up similarly.

Industrial production in Singapore shrank -5.7% in January from December, the second large fall in the past three months. From the same month a year ago it was up just +1.1%.

In China, their equities markets are in a post-holiday lull. Prices are retreating. There are no scheduled listings and in fact no applicants cleared for stock exchanges’ review. Existing applications to list are being withdrawn. A heavy clamp is going on the private sector, in complete contrast to official speeches extolling the importance of the private sector. Investors notice the disparity. And investors know that home team interventions never last and are wary of having a stake in an essentially rigged market.

Also in a lull are business expectations in China. Steel rebar prices fell to their lowest level in nearly four months. We point out these interesting big trends, but that does not necessarily indicate that their whole economy is backsliding - it just explains why the growth impetus in the world's second largest economy is leaking away. The bulk of their SOE-led economy is still active and supporting their huge population and demand.

In Australia, the scale of the discounts on CBD office buildings is getting some focus. Values are still falling to entice buyers, and in Sydney insiders think they will bottom out at a -23% retreat. But those insiders are industry boosters, so you would be brave believing their "the bottom is close" talk. The depreciation is less in other main centers, they reckon.

The UST 10yr yield starts today at 4.30% and up +5 bps from this time yesterday. The key 2-10 yield curve inversion is fractionally deeper at -44 bps. And their 1-5 curve inversion is slightly more at -73 bps. And their 3 mth-10yr curve inversion still at -115 bps. The Australian 10 year bond yield is now at 4.15% and down -2 bps. The China 10 year bond rate is now 2.41% and a new all-time low. The NZ Government 10 year bond rate is unchanged at 4.92%.

Wall Street has started its Monday session down -0.2% on the S&P500. Overnight, European markets were mixed; Paris down -0.5%, Frankfurt up +0.1% and the others in between. Yesterday Tokyo ended its Monday session up +0.4% but Hong Kong fell -0.5% and Shanghai was down -0.9% with tough late afternoon trading. Singapore ended down -0.4%. Meanwhile the ASX200 rose marginally, up +0.1% and the NZX50 ended its Monday trade down -0.1%.

The price of gold will start today down -US$8/oz from yesterday at US$2027/oz.

Oil prices are up +50 USc at just on US$77/bbl in the US while the international Brent price is now just under US$81.50/bbl.

The Kiwi dollar starts today at 61.7 USc and down -¼c from this time yesterday. Against the Aussie we are still at 94.4 AUc. Against the euro we are nearly -½c lower at 56.9 euro cents. That all means our TWI-5 starts today at just on 71.1 and -30 bps lower.

The bitcoin price starts today at US$53,313 and up a solid +3.9% from this time yesterday. It is now back to where it was more than two years ago. Volatility over the past 24 hours has been moderate at +/- 2.6%.

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