US inflation expectations unchanged; Chinese exports surge; India's inflation eases; Aussie inflation signals up; Spain proposes 100% property sales tax; UST 10yr at 4.77%; gold down and oil up; NZ$1 = 55.5 USc; TWI = 66.6

Here's our summary of key economic events overnight that affect New Zealand with news the week has started tentatively. But there was an eye-catching housing affordability proposal in Spain,

But first, there were no real surprises in the latest survey of American inflation expectations. Consumers still see a 3% rate for the year ahead, more for food (+4.0%), less for petrol (+2.0%), but still high for rent (+5.5%). For three years ahead, expectations are for no relief, up from +2.6% to +3.0% per year.

But more than expected, Chinese exports surged +10.7% in December from year-ago levels, much more than the market forecasts of +7.3% and accelerating from a +6.7% rise in November. Traders are clearly front-loading orders in anticipation of new aggressive tariffs from the incoming US administration. But Chinese exports to New Zealand were down -1.8% in the month, their imports from us down -7.9%.

Chinese imports only rose +1.0%.

China's new vehicle sales rose to 3.5 mln units in December, spurred by those taxpayer discounts to encourage spending. They were more than +10% higher in the month than the same month a year earlier. NEVs took a record 45% share of these latest sales. Traditionally, December is their peak sales month of the calendar year.

India's CPI inflation rate eased from +5.5% in November to +5.2% in December. Food prices, which account for nearly half on their survey, rose +8.4%. If there is good news among this data it is that prices fell in December from November.

Meanwhile, the Indian currency fell to more than 86.7 rupee to the USD. At the start of the year it was 'only' 85.5 so that is -1.4% in two weeks. At the start of 2024 it was at 83 so -4.3% since then. (Still, that is nothing like the -10.4% fall by the NZD against the USD since the start of 2024.)

In Australia, the Melbourne Institute's Monthly Inflation Gauge rose by +0.6% in December, sharply accelerating from a +0.2% increase in November and marking the highest level since December 2023. It was also the fourth consecutive month of gain.

The ANZ-Indeed Australian Job Ads survey rose by +0.3% in December from November, swinging from a revised -1.8% drop in the prior month. The latest level suggests their labour market is still resilient on a short-term basis despite elevated interest rates. On an annual basis however, job ads dropped -12.5% from December 2023. They have dropped almost -28% from their peak in 2022.

In Europe, Spain like many others is facing a housing crisis. They fear a "rich owner / poor tenant" split that is developing elsewhere. Their government has twelve measures proposed to deal with the issue, one of which is a 100% tax on non-EU house buyers.

And for the record, the coal price fell further overnight. Oddly, demand is up in China, but so is output - more so - and they have fast-building inventories.

The UST 10yr yield is now at just on 4.77%, and up just +1 bp from this time yesterday. The key 2-10 yield curve is still positive by +39 bps. Their 1-5 curve is slightly positive at +37 bps. And their 3 mth-10yr curve is also more positive, now by +49 bps. The Australian 10 year bond yield starts today at 4.69% and up +16 bps. The China 10 year bond rate is now at 1.65% and up +3 bps. The NZ Government 10 year bond rate is now at 4.72% and up +7 bps.

Wall Street is starting its week down -0.2% on the S&P500. Overnight, European markets all fell about -0.3%. Tokyo ended its Monday trade down -1.0%, Hong Kong was also down -1.0% and Shanghai slipped -0.2%. Singapore dipped -0.3%. The ASX200 ended its Monday trade down a sharpish -1.2% while the NZX50 ended down -0.5% with a small late recovery.

The price of gold will start today at US$2665/oz and down -US$25 from yesterday.

Oil prices are up +US$2 from yesterday at just over US$78.50/bbl in the US while the international Brent price is now just over US$81.

The Kiwi dollar starts today just on 55.5 USc and down -10 bps from this time yesterday. Against the Aussie we are down -20 bps at 90.2 AUc. Against the euro we are up +10 bps at 54.4 euro cents. That all means our TWI-5 starts today at just over 66.6 and down less than -10 bps from yesterday.

The bitcoin price starts today at US$92,068 and down -3.0% from this time yesterday. Volatility over the past 24 hours has been high at +/- 3.5%.

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