Here's our summary of key economic events overnight that affect New Zealand, with news natural events will likely have an increasing say in how the international economy operates.
But first in the US, mortgage applications were lower last week again, and the good rises in the first two weeks of the month are fading. Even essentially unchanged mortgage interest rates isn't stimulating new loan applications. The talk of an American housing market recovery might be a mirage.
There was another UST 7yr bond auction earlier today and that brought rising demand. Today's event delivered a median yield of 4.14% which was lower than the 4.27% at the prior equivalent event a month ago. It is only marginal, but the interest rate load on the US Federal government borrowing is easing.
China's industrial profits bounced-back in February, rising by +10.2% from the same month a year ago. They are cheering the 'strong rise'. But we must recall they were especially weak last year. Compared with 2022, the February 2024 result is down -21.2%. And it is -17.7% lower than 2021's result. So they shouldn't be too satisfied. There was almost no recovery in State-owned enterprises - all the current 'recovery' came from the private sector.
The central bank of Sweden likes what it sees locally in the track of inflation. It is currently running at 4.5% and has been sticky. But they expect it will fall soon to near 2%. That view encouraged them to signal that their current policy interest rate of 4% will be trimmed soon, starting in May or June.
In Australia, their Monthly Inflation Indicator was at 3.4% in February. This is the same rate they reported in December and January. Their core rate fell to 3.9% in February, down from 4.1% in January. Like everyone, they are finding it hard to wring out the last elements of excessive inflation. New Zealand's March quarter CPI rate will be released on Wednesday, April 17, 2024. In Q4-2023 it ran at 4.7%.
You know about the West African crisis hitting cocoa production and prices. Now you should know that a cyclone in Madagascar will roil the market for vanilla beans. Vanilla is a main source of foreign currency for the country.
And back in the US, warnings are starting to appear that their hurricane season this year could be their biggest and most damaging.
Further, we should note that a giant of psychology and a huge contributor to behavioural economics, Daniel Kahneman has died earlier today. He was a Nobel Laureate, and if you haven't read his hugely influential book Thinking, Fast and Slow, which summarises much of his research, you should take the time to do so. More here.
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The UST 10yr yield will today at 4.19% and down -5 bps from this time yesterday. The key 2-10 yield curve inversion is marginally more at -38 bps. And their 1-5 curve inversion is out to -81 bps. Their 3 mth-10yr curve inversion is now at -118 bps. The Australian 10 year bond yield is now at 3.99% and down -6 bps from yesterday. The China 10 year bond rate is unchanged at 2.31%. The NZ Government 10 year bond rate is now at 4.67% and also unchanged from yesterday.
Wall Street has opened its Wednesday session with a modest +0.3% rise. Overnight European markets were mixed with London unchanged, Paris up +0.2%, and Frankfurt up +0.5%. Yesterday Tokyo closed up +0.9%. But a late retreat saw Hong Kong closed down -1.4% and Shanghai closed down -1.3%. Singapore ended its Tuesday session up +0.6%. The ASX200 closed up +0.5% while the NZX50 closed down -0.2%.
The price of gold will start today firmer by +US$14 from yesterday at US$2191/oz.
Oil prices have fallen -US$1 to just under US$81/bbl in the US while the international Brent price is now at US$85/bbl. American crude oil stocks are running much higher than anticipated.
The Kiwi dollar starts today at just on 60 USc and marginally softer than this time yesterday. Against the Aussie we are unchanged at 91.9 AUc. Against the euro we have softened slightly to 55.4 euro cents. That all means our TWI-5 starts today just under 69.3 and again little-changed.
The bitcoin price starts today softer at US$68,998 and a full -1.0% dip since this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.4%.
Over the Easter holiday break, we will have normal weekend service, and will return with these daily briefings on Tuesday, April 2, 2024.
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