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Here's our summary of key events overnight that affect New Zealand, with news that risk appetites seem to be improving.
Wall Street is positive today with the S&P500 up +0.8% in afternoon trade. Overnight European markets were even stronger, generally up more than +1% (although London was a laggard). Yesterday, Hong Kong had a massive recovery, up almost +4% on the day as the hardline Hong Kong governor caved a bit in her dealing with protesters. (It doesn't seem to have tamed them.) Shanghai was also positive, up almost +1% too.
The US trade balance for July was reported showing a minor improvement from June, but year-on-year it is -15% worse and for the year to July, it is -14% worse so in reality, things are not improving despite the trade war. Merchandise exports are down -2.5% year-on-year and merchandise imports are up +1%. Even in services where the US traditionally runs surpluses, even that is down -9.6% year-on-year. A withdrawal from trade by the world's largest economy is underway. Oddly, their deficit with China surged to a six-month high and almost a record.
US mortgage applications were down too, and for a third week in a row, and somewhat the trade war was cited as the reason as well.
The Federal Reserve's September Beige Book survey indicates only modest growth in the US as the trade tensions dents prospects. That reason got 16 mentions in their summary of their 12 reporting districts.
Canada also reported its trade balance for July and that showed a larger deficit too.
The Canadian central bank reviewed their official interest rate overnight, leaving it at 1.75%. Theirs was a positive review with growth high, inflation at target and their economy operating at about full capacity. Only the trade situation risks kept it from signaling their next move might be up on the inflation risks of fast rising wages.
In Vancouver, house sales volumes rose in August but prices fell to a 27 month low.
In China, there is more data showing that their economy is not hurting quite as much as the Americans assume. The independent Caixin survey of services (conducted by American firm Markit) shows their Services Business Activity Index posting 52.1, up from 51.6 in July, signalling the strongest rise in services activity for three months. It is still modest however. Earlier this same survey showed factory activity expanding (50.4).
And the iron ore price is turning back up again. Not sure why because the Chinese Communist Party wants clear skies for its upcoming 70th anniversary celebrations and is instructing steel mills to shut production ahead of the celebrations.
In the UK, the mood seems to have improved with a hard Brexit less likely and the new prime minister looking neutered. And in Italy, the recent political storm looks like it has passed as well with their hard-line political force also rejected.
In Australia, their economy grew +1.4% in the year to June, according to the 'real' GDP data released yesterday. This is the slowest in ten years, but as analysts were expecting. It was held back by their household sector.
And staying in Australia, new car sales plunged there in August, down -10% from the same month a year ago. The industry claims vehicle finance is now much harder to get.
Not helpful either is their latest services PMI which shows the sector in a small contraction. All this negative data may be why the ASX200 fell -0.3% yesterday, contrasting with the +0.6% NZX50 gain, to a new record high.
The UST 10yr yield is down -1 bps to 1.46%. Their 2-10 curve is now just positive again at +2 bps. Their negative 1-5 curve is still at -40 bps. And their 3m-10yr curve is still a negative -60 bps. The Aussie Govt 10yr is up +3 bps at 0.95%. The China Govt 10yr is unchanged at 3.08%, while the NZ Govt 10 yr is down -1 bps at 1.06%.
Gold is up at US$1,555/oz, a rise of another +US$11 since this time yesterday.
US oil prices are up strongly today, rising more than +US$2 at now just on US$56/bbl. The Brent benchmark is also higher at just on US$60.50.
The Kiwi dollar is up marginally to 63.4 USc. On the cross rates we also unchanged at 93.6 AUc. Against the euro we are the same at 57.7 euro cents. That leaves the TWI-5 at 68.9.
Bitcoin is now at US$10,619 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 ».