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Here's our summary of key events overnight that affect New Zealand, with news the Fed's market liquidity pressures are still rising.
First however, it looks like Japan and the US have reached a deal on a new bilateral trade agreement. It is a modest affair.
Sales on new-built family homes rose in August, and are now a healthy +18% higher than the same month a year ago, building on a rising trend that started in May. This was substantially better than analysts were expecting.
But US mortgage applications took a sharp fall last week even if they are still higher than this time last year.
In New York, their repo operations are being stepped up to provide ever more liquidity. The Fed said it would increase the size of overnight cash loans offered in tonight's trading to US$100 bin from US$75 bn yesterday, while doubling the size of a two-week offering tomorrow to US$60 bln. They are still scrambling to contain the pressures.
The CPB World Trade Monitor shows that volumes rose +1.9% in July, recovering all of the sharp -1.7% fall in June. The big export winners were China, rising +3.6% on this basis and other east Asian nations who were up +4.6%, while Japan was up +1.0%. The US and Europe showed virtually no gains while "other advanced countries" like New Zealand gained +2.6% in exports. US imports fell in this survey, while those from China rose +5.8% and for Japan they rose +4.5%.
Next week's Autumn Festival national holiday in China will see about 800 mln people travelling, the largest holiday relocation ever and a ten percent rise from the record set last year. A small fraction will travel overseas but even so the numbers will be huge. The top 10 countries and regions favoured by Chinese outbound tourists are Japan, Thailand, Italy, Russia, the United States, Turkey, Indonesia, Germany, Australia and the United Kingdom.
In Australia the Government has pushed back against ASIC for being too stringent in enforcing responsible lending rules, warning that this could penalise "hard-working families" trying to get a housing loan, and hurt the economy.
The UST 10yr yield has reclaimed all of yesterday's sharp fall and is back up to 1.72% today, up +8 bps from this time yesterday. Their 2-10 curve is still positive at +4 bps. Their negative 1-5 curve is narrower at -23 bps. Their negative 3m-10yr curve is much narrower at -16 bps. The Aussie Govt 10yr is up +1 bp to 0.97%. The China Govt 10yr is at 3.14% and also up +1 bp. The NZ Govt 10 yr has dipped to 1.14%, a -2 bps shift overnight.
Gold is down -US$22 to US$1504/oz.
US oil prices are lower today at now just under US$56.50/bbl. The Brent benchmark is just under US$62.50.
The Kiwi dollar has fallen back by almost -½c this morning, back down to 62.8 USc. On the cross rates we are still at 93 AUc however. Against the euro we are little-changed at 57.3 euro cents. That puts the TWI-5 back only marginally to just on 68.3.
Bitcoin is now at US$8,345 and a -12% dump from this time yesterday. Remember, this price was over US$10,000 on Monday. 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 ».