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Here's our summary of key events overnight that affect New Zealand, with news the Europeans are now struggling with two major political crises that have strong economic implications.
But first up today, the overnight dairy auction came in with very little change, marginally lower by just -0.2% in US dollar terms on good volumes offered. In New Zealand dollars, prices are up +1.4%. The big mover however was the WMP price which gained +2.1% in US dollars terms and was up +3.6% in New Zealand dollar terms. Overall, prices are essentially unchanged since June and nothing today will cause any reassessment of farmgate milk prices.
International news is light because the northern hemisphere is now deep into its holiday season. Market trading volumes are also light.
Wall Street has given up much of yesterday's bounce with the S&P500 down -0.6% so far. This follows European markets overnight that turned negative on the situation in Italy. Yesterday, Asian markets marked time, but the ASX200 was up +1.2% and the NZX50 was up +1.0%, both outliers on the international scene.
In Canada, data for June manufacturing sales was disappointing, down because of sharpish falls in sales of coal and oil.
In China, their banks sold a net US$6.1 of foreign exchange in July, the least in a long time. This is signaling that capital outflows from China are drying up quickly and the August flow is expected to be even less. The devaluing yuan won't help, but at least it isn't causing them capital flight.
In Italy, their coalition government has collapsed, plunging the country into deeper political turmoil and triggering a scramble to form a new coalition, or hold snap elections that far-right populists would likely win. It was the far-right coalition partner who pulled the plug.
And the EU has rejected the UK's 'demand' that there be no hard border with Ireland in the event of a hard Brexit. It looks like a formal border crossing will need to be re-established.
In Australia, consumers are getting worried about the general economic situation. The latest ANZ-Roy Morgan consumer sentiment survey has the overall index falling below its long-term average, and the perception of future economic conditions falling a massive and sudden -8%.and its lowest level since late 2017. Aussie retailers will worry that the "good time to buy" index fell sharply as well.
The UST 10yr yield is still at 1.56%, unchanged from this time yesterday and giving up the brief rise to over 1.60% in the interim. Their 2-10 curve is flatter however, now at just +4 bps and their negative 1-5 curve is wider at -30 bps. Their 3m-10yr curve is wider, out at a negative -51 bps. The Aussie Govt 10yr is unchanged at 0.93%. The China Govt 10yr is also unchanged at 3.04%, while the NZ Govt 10 yr is up +2 bps at 1.09%.
Gold is back higher today and now at US$1,506/oz, a gain of +$8 overnight.
US oil prices are little-changed today at just on US$56/bbl. The Brent benchmark is up slightly to US$60.
The Kiwi dollar is little-changed at 64.2 USc. On the cross rates we are stable at 94.7 AUc. Against the euro we are still at 57.8 euro cents. That leaves the TWI-5 at 69.5.
Bitcoin is now at US$10,752 and virtually unchanged 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 ».