Here's our summary of key events overnight that affect New Zealand, with news markets are disappointed they aren't going to be fed more monetary juice any time soon.
But first in the US, inflation expectations are starting to rise. A Fed survey out overnight shows consumers are now expecting higher prices and this comes after three straight months when they weren't.
It's a political issue in the US - raising the minimum wage. It is now just US$7.25/hour. One political party wants it raised to US$15/hour. Now an independent study has shown that to do so will both cost 1.3 mln people they jobs and raise the incomes for 17 million workers.
US consumer credit rose a healthy +5.0% in May. Fixed loans rose only +3.9%, but revolving credit arrangements rose a remarkable +8.2% on a year-on-year basis. There seems to be plenty of debt appetite by American consumers still.
On Wall Street, equities are falling as investors backed away from hopes that the Federal Reserve would aggressively cut interest rates to boost the economy. The data suggests it doesn't need an emergency boost. The S&P500 is down -0.6% so far today. That follows European markets that were down only about -0.2% (despite the Deutsche Bank cull of 18,000 investment bankers). But none of these declines have been anything like the drops in Shanghai yesterday. This key market was down an eye-popping -2.6% on fears that ranged from the trade war impact on firms, uncertainty on what Beijing will do next, and a general lowering of profit prospects. Hong Kong was infected as well, down -1.5% on the day. Tokyo was down -1% as was the ASX200 (down -1.2%).
In China, their foreign exchange assets rose in June, either casting doubt on the actual pressure these reserves are under - or indicating how effective their cross-border controls have become.
And China may be starting to get serious about protecting intellectual property. The shift isn't from official sources, but from the business community itself. Suddenly, registering trademarks has become important and defending them a normal part of business. This is a ground-up change.
In Germany, a closely-watched investor sentiment survey has come in much weaker than expected, and the expectations weren't high in the first place. Data released overnight for May German industrial production was -3.7% lower than the same month in 2018. But at least their exports are holding up well, and they had a small rise in their trade balance.
In Turkey, after the firing of their central bank boss, their currency's fall accelerated. The inflationary impacts will grow. We might be witnessing a dangerous spiral.
In Australia, ratings agency S&P wants to see continuing surpluses well into the future - and says they are the basis of them keeping their AAA credit rating.
The UST 10yr yield is now at 2.04%. Their 2-10 curve is now at +16 bps and their negative 1-5 curve is at -16 bps. The Aussie Govt 10yr is at 1.33%, down -3 bps overnight. The China Govt 10yr is up a marginal +1 bp to 3.20%, while the NZ Govt 10 yr is up +3 bps and now at 1.57%.
Gold is little-changed overnight, down just -US$2 to US$1,396/oz.
US oil prices are little-changed again today. They are now just on US$57.50/bbl. The Brent benchmark is also little-changed at US$64.50.
The Kiwi dollar is holding at 66.3 USc. On the cross rates we are marginally firmer at 95.1 AUc. Against the euro we are similar at 59.1 euro cents. That leaves the TWI-5 little-changed at just on 71.2.
Bitcoin is back up today and now at US$11,889, a +3.8% gain from this time yesterday. Volatility in the past 24 hours has been a more modest +/- 3%. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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