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Here's our summary of key events overnight that affect New Zealand, with news China is proving quite a bit more resilient than its American foe anticipated, and Wall Street seems relieved.
Firstly in the US, data for their wholesale trade was marginally lower in June from the same month a year ago. This undershot analysts expectations of a small gain. At least wholesale inventories aren't growing either.
But even as the trade war with the US rages on, the Chinese trade balance for July rose unexpectedly to surplus of +US$45.1 bln. Surprisingly, their exports rose +3.3% compared with July 2018 while imports were down more than -5% on the same basis. They are reporting their sensitive merchandise trade surplus with the US at +US$28 bln in July alone. That was only down from just under +US$30 bln in June. In their trade with New Zealand, they are reporting they are in a rising deficit of -US$615 mln, up from -$607 mln in June.
The Chinese trade data has calmed financial markets. Yesterday, Shanghai was up +0.9%, Hong Kong up +0.5% and Tokyo up +0.4%. China's economy seems to be more of a global demand engine than assumed by many, and Wall Street seems to see that as a good thing, now up +1.6% in trading so far today. European markets were up similarly.
Yesterday we reported a sharpish falloff in airfreight volumes. But today we can update the international passenger traffic data and that shows rising growth. In the year to June, passenger travel rose +5.4% from the same month in 2018, although the data for the Asia/Pacific region was only +4.0%. The region with the weakest growth is North America.
In commodities trade, the price of iron ore has suddenly entered a bear market, down now -20% from its high just four weeks ago.
The UST 10yr yield is firmer today and now at 1.73%. Their 2-10 curve is just over +11 bps while their negative 1-5 curve is now at -25 bps. The Aussie Govt 10yr has recovered +4 bps to be at 0.98%. The China Govt 10yr is lower by -2 bps at 3.05%, as is the NZ Govt 10 yr which is down another -6 bps at 1.13%.
Gold is up another +US$4 today to US$1,506.
US oil prices are firmer today on the Chinese trade data. They are up +US$1 and now just on US$52.50/bbl. The Brent benchmark is now on US$57.50.
The Kiwi dollar starts today firmer at 64.9 USc. On the cross rates we are down slightly at 95.2 AUc. Against the euro we are firmer at 57.9 euro cents. That sets the TWI-5 at just on 70.
Bitcoin is now at US$11,593 and a small -1.2 slip from this time yesterday. 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 ».