Here's our summary of key events overnight that affect New Zealand, with news there is a spreading of trade disputes, reopening old feuds.
In the US, job openings fell in May, pulled down by declines in the construction and transportation industries, potentially flagging a slowdown in employment growth in the months ahead. Job openings are a measure of labour demand and they fell by -49,000 to 7.3 million in May. Their hiring rate fell by -266,000.
North of the border, Canadian housing starts surged to the highest level in more than a year in June, led by construction of multiple-family dwellings such as apartments and townhouses. Builders started work on an annualized 245,657 units last month, a jump of +25% from May. But from the same month a year ago, the rise was minor, emphasising just how big the dip has been in 2019. One of the interesting regional aspects is that Vancouver housing starts are surging even more, up +72% year-on-year even as the volume of resales of existing houses stays in the doldrums.
In a new analysis, it is being revealed that the world’s debt to China grew tenfold between 2000 and 2017, from US$500 bln to US$5 tln, with 80% of emerging nations receiving Chinese funding as debt. And half of all Chinese overseas funding is outside data captured by World Bank and IMF, raising concerns over transparency.
On the sidelines of the China-US trade war, another one is breaking out and it is taking a pretty nasty turn. Japan and South Korea are finding it easy to kindle past enmities, and these are being expressed most easily in trade and tariff retaliations. Samsung is Japan's target of choice. Now that the US has lost its credibility as a peacemaker, it is perhaps not surprising that this cultural animus is resurfacing.
Talks are about to restart on the US-China dispute. But it is hard to see any likely progress; China is demanding the US withdraw support for Taiwan; the US is demanding China buy their farm products before talks start.
In Australia, the closely-watched NAB business sentiment survey shows the post election bounce of confidence was short-lived. The survey results for June suggest that the business sector has lost significant momentum over the past year or so. Business confidence largely unwound the bounce in May and while business conditions rose in the month, they remain below average. The recent run of results also suggest that the economy was unlikely to record a significant pickup in growth in Q2.
Standard & Poors has today changed its ratings outlook on the four pillar banks from 'negative' to 'stable' as a result of the easing of APRA's capital-raising requirements. There has been no change in the core credit ratings at this time.
Aussie banks will be turning their backs on central Melbourne apartments. CoreLogic is reporting that up to a third of dwellings there are being resold at a loss and the loss-rate is rising.
The UST 10yr yield is now at 2.06%. Their 2-10 curve is still at +16 bps and their negative 1-5 curve iat -16 bps. The Aussie Govt 10yr is unchanged at 1.33%. The China Govt 10yr is down a marginal -1 bp to 3.19%, while the NZ Govt 10 yr is down -1 bp and now at 1.56%.
Gold is little-changed overnight, up just +US$2 to US$1,398/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.
The Kiwi dollar is softer at just above 66 USc. On the cross rates we are marginally firmer at 95.4 AUc. Against the euro we have dipped to 58.9 euro cents. That leaves the TWI-5 little-changed at just on 71.1.
Bitcoin is back up today and now at US$12,537, another +5.5% gain from this time yesterday. That means this price is now at just on NZ$19,000 and you have to go back to January 2018 for when it was last at this level. Volatility in the past 24 hours has been +/- 4%. 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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