Here's our summary of key economic events overnight that affect New Zealand, with news Wall Street is ending its week with tech weakness dominating in equity markets, and Fed speaker comments (here and here) pushing long benchmark bond yields higher. The USD is soft and down nearly -1% for the week. Silver is retreating today although gold is up near its record high.
Canadian building consents surprised analysts with quite a surge in October, especially residential consents for multi-unit buildings in Toronto. That drove an outsized +15% national gain from September to be +19% higher than a year ago. On an annual basis, residential consents are also up +19% with Ontario up more than +28%.
In China, new loan demand remains unusually weak, and in November came in even lower than the weak forecasts by observers. Chinese banks extended ¥390 bln in new yuan loans, up from the unusually low October level but still below both last year’s weak ¥580 bln and market expectations of ¥500 bln. Soft household demand continues to weigh on stimulus efforts. Remember, over the past five years, this loan demand has averaged ¥830 bln in a November month so the current drag is notable.
And it is looking increasingly like investors, including boardroom directors in charge of making capital expenditure decisions, have goner on a quiet strike in China.
India's CPI inflation remains very low at +0.7% in November from a year ago, up from its record low level in October. This was driven by an almost -4% fall in food prices.
India's bank loan growth is back up +11.5% from a year ago and its fastest expansion this year.
In Malaysia, both their retail sales (+7.2% year-on-year) and their industrial production (+6.0%) expanded at an accelerating pace in October data released overnight.
In Japan, it is becoming clear (from company financial reporting) that the Trump tariffs on Japanese exports have backfired. Japanese companies raised their prices after the initial tariff hit, the Americans paid the higher prices, and when Washington backed away from some of the more extreme levels after negotiation, those hiked prices didn't retreat. They stayed up and boosted Japanese company profits. The picture was probably similar elsewhere. The ultimate losers have been the American buyers. American reshoring has been weak, so much so that one Fed member is now more worried about jobs than inflation.
The UST 10yr yield is now at 4.20%, up +8 bps from this time yesterday, up +6 bps from this time last week. The key 2-10 yield curve is now at +65 bps. Their 1-5 curve is still positive by +21 bps and the 3 mth-10yr curve is positive by +53 bps. So all the moves up are at the long end. The China 10 year bond rate is up +1 bp at 1.85%. The Japanese 10 year bond yield is up +2 bps at 1.95%. The Australian 10 year bond yield starts today at 4.76%, up +6 bps from yesterday, up +5 bps for the week. The NZ Government 10 year bond rate starts today at 4.63%, up +3 bps from yesterday, up +15 bps for the week.
Wall Street has started its Friday with the S&P500 down -1.1%, and overwhelming the dip-buyers. It is heading for a -0.8% weekly pullback. Overnight, European markets were negative between London's -0.6% fall and Paris's -0.2% dip. Yesterday, Tokyo ended its Friday trade up +1.4% for a weekly +0.4% gain. Hong Kong was up +1.7% for a weekly -0.4% dip, and Shanghai rose +0.4% yesterday to end its week down -0.5%. Singapore was up +1.5%, an unusually strong rise for them. The ASX200 ended its Friday with a +1.2% rise for a similar weekly gain. But the NZX50 finished up only +0.1% and a -0.6% weekly retreat.
The Fear & Greed index has remained just in the 'fear' zone and little-changed from last week.
The price of gold will start today at US$4294/oz, and up +US$21 from yesterday, up +US$79 from a week ago and back near its mid-October peak. And we should note that silver has fallen -US$2 today to just under US$62/oz.
American oil prices are +50 USc firmer at just under US$57.50/bbl, while the international Brent price is just under US$61.50/bbl. Both are -US$2.50 lower than a week ago. Separately, it is very noticeable that the North American rig counts are still languishing near their four year lows. No-one is rushing to invest as prices and demand stay very low.
The Kiwi dollar is -10 bps softer from yesterday, now at just under 58.1 USc. But it is up +40 bps from a week ago. Against the Aussie we are unchanged at 87.2 AUc. Against the euro we are down -10 bps at 49.4 euro cents. That all means our TWI-5 starts today at just under 62.1, and down -10 bps from yesterday but up +20 bps for the week.
The bitcoin price starts today at US$90,264 and up +0.3% from this time yesterday, and up +1.6% from last week. Volatility over the past 24 hours has been moderate, at just on +/- 2.0%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
1 Comments
Well the Japanese price rise for their exports to the USA sort of illustrates one danger of tariffs doesn’t it. In so much it has evidenced to those exporters that the market come consumer can stand those price levels for those products, so why not then make hay while the sun shines. In a way in a reverse sense, it demonstrates that if GST was for example taken off food in NZ , then such as the supermarkets would soon have those prices at retail back up there because it is already proven what the consumer will pay.
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.