Here's our summary of key economic events overnight that affect New Zealand, with news the global service sector is in reasonable shape, helping generate new impetus to the world's economy. Equity markets are riding the wave.
In China, their private Caixin services PMI brought some good solid news. It was little-changed in April from the expansion in March, but now the 16th straight month of expansion of services their services sector. This private survey reports a faster expansion than the official version. Of special note is that new business grew the most in nearly a year and the fastest since May 2023. Foreign sales rising the most in ten months.
According to the combined factory and services PMIs, the Eurozone expanded its fastest in a year in April. In fact their services expansion was faster than either China, Japan or the US. Their new business volumes rose for a second successive month and at the quickest pace since May last year.
Only India is expanding faster among the major global economies.
In Australia, the Melbourne Institute monthly inflation monitor for April found an increase in monthly inflation, although annual inflation continues to decline. Annual changes in the cost of living also fell for most household types.
And Aussie job ads rose in April somewhat unexpectedly and halting a longish retreat. In fact they were almost +3% higher in the month from March. Better, the rise was broadbased, except for healthcare. However these levels are still -6.6% lower than a year ago, and as good as the recent rise was, in fact it is trending at a flat level.
All eyes will be on the RBA at 4:30pm today (NZT) and their monetary policy review. They have a history of occasionally acting differently to what markets expect so there is some market pricing tension about what they will come up with. The main 'risk' is that they will be more hawkish than expected, given their sticky inflation levels.
It is very noticeable that some key mineral prices are on the rise again. That includes zinc, nickel, tin, lead, aluminium, and copper. A rise in global demand is behind the broad recent increases. There are some tighter supply points too, as is usual in the transition.
The UST 10yr yield is now at 4.49% and down -2 bps from yesterday. The key 2-10 yield curve inversion is a little deeper at -33 bps. And their 1-5 curve inversion is still at -66 bps. Their 3 mth-10yr curve inversion is now at -91 bps and also 3 bps deeper. The Australian 10 year bond yield is now at 4.43% and little-changed from yesterday. The China 10 year bond rate is little-changed at 2.32%. The NZ Government 10 year bond rate is now at 4.83% and down -6 bps from yesterday.
Wall Street has opened its Monday trade up +0.8%. Overnight, European markets were up about +0.5%, except Frankfurt which was up a full +1.0%. Yesterday Tokyo was closed for a public holiday. Hong Kong ended its Monday trade up +0.6% while Shanghai rose +1.2% in its first trading since its week-long holiday. Singapore ended up +0.3%. The ASX200 was up +0.7% in its Monday trade but the NZX50 fell a full -1.0%
The price of gold will start today up +US$24 from yesterday at US$2325/oz.
Oil prices have stayed down at just under US$78/bbl in the US while the international Brent price is now just under US$83/bbl.
The Kiwi dollar starts today unchanged from yesterday at just over 60.1 USc. Against the Aussie we are softer at 90.7 AUc. Against the euro we are little-changed at 55.8 euro cents. That all means our TWI-5 starts today just on 69.3 and unchanged from yesterday.
The bitcoin price starts today at US$63,094 and down -1.8% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.0%.
The easiest place to stay up with event risk is by following our Economic Calendar here ».
20 Comments
"I'm being bombarded with evidence that my dogmatic belief that economic growth can't happen without financial sector growth might be wrong. Well, I'm never wrong, so it must be a massive government conspiracy to fake the data"
These geniuses are smart but have failed to grasp the number of variables that can destroy theoretical relationships between monetary / financial variables and the real economy. In many ways Joe public's crude instincts may be superior - does the financial sector really drive the physical economy of goods and services? No, it's bloody obvious that's driven by labour, physical capital and land. The financial sector's contribution is to influence the quantity, distribution and velocity of money, which has complex and unpredictable flow on effects on the size of the real economy, but more predictable effects on the distribution of wealth.
I suspect the authors above spend 90% of their time thinking in terms of the quantity of money with little consideration of the distribution and velocity variables.
S & P 500 has to clear this 5199-5249 range or we have a double top in
Will the index consolidate, meander lower or crash in your opinion
France sends combat troops to Ukraine battlefront
Will the deployment of a Foreign Legion unit commanded by French officers trigger a wider European war?
Hard to gauge the impact on the actual battlefield(s) but certain implications arise. For instance a precedent, for want of a better word, for Russia to employ the services of say Nth Korean troops formalised similarly as mercenaries.
I would argue that sabre rattling is all that Russia has left and that is quickly becoming a predictable and toothless threat. Putin is well aware of the consequences of any nuclear exchange of any sort - Russia (and most likely much of the northern hemisphere) would be ash and unliveable for centuries to come. It would not end well. The fact that Russia has to resort to sabre rattling in itself is telling - Russia is not sure it can defeat NATO in a conventional war, is discontent growing at home, is the military industrial complex not producing as much as expected. The western press has much more limited information about what is actually happening in Russia compared to the rest of the Western world.
Perhaps. Was bound to happen eventually that a Nato state would send boots.
The comments appear to suggest this is fake news???
1. Easy to question news that comes, and we should.
2. Hard to see through what they don't tell us. Be very sceptical and try to see the gaps.
3. Factoid, but it counts. Macron fancies himself a warrior. Has the most extreme view of all the leaders I think.
Fake AF. Original tin foil hat poster is gone. No NATO troops will set foot in Ukraine and if Russia nukes Ukraine (very unlikely) NATO won't nuke back (NATO will probably ramp up support including possible air support).
Macron is afraid of US abandonment and is trying to implement a strategy to trigger NATO involvement to guarantee that support.
If they fail to do so and US support for Ukraine is withdrawn it will expose the inadequacy of French military strength. This would have very big consequences throughout Europe.
From the US perspective, with both France and Israel trying to draw them into direct conflict, they have the same concerns - i.e. the danger that if they commit to direct conflict it may expose their true adequacy. Obviously, there is also the risk that things could rapidly escalate to 'nuclear' should they become directly involved.
I think this is a much more dangerous time than many appreciate.
Yes basically this could have been the start of WW3 on a slow burn. The USA will not get directly involved and its almost certain that Trump will get elected in November short of him dropping dead and then support for Ukraine will get pulled.
Almost certain? Do you know something the rest of us don't?
There seems to also be several thousand other Western troops in there to act as support to the weapons systems. Also rumours of other countries' special forces. Feels like Vietnam before the Gulf of Tonkin incident
The UK’s “second empire” of tax-free jurisdictions around the world persists despite the overwhelming evidence that it enables corruption, drains public budgets, and exacerbates inequality.
Just bumped into a friend who is a senior manager at one of the big Aussie Banks. I remarked that I'm surprised there haven't been more mortgagee sales.
His response was that the banks will do anything to avoid taking action due to potentially disasterous PR consequences. He also stated that there are a huge number of 'zombie' businesses that are insolvent but that the bank are yet to take action on. He thought thsat would likely change over the next 2-3 months.
Interesting times.
I am hearing the same re mortgagee sales, As long as there is communication between bank and client they are trying to avoid forcing a sale
Time to update my unscientific survey
Mortgagee listing count via search on trademe
October 2022 = 26
March 2023 = 37
February 2024 = 44
Edit: May 2024 = 76 (today was 63 on the 2nd April)
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.