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Here's our summary of key events overnight that affect New Zealand, with news that after 15 months of trade war, the 'easy-win' is as elusive as ever.
The US merchandise trade deficit was -US72.2 bln in August, up slightly from July but down slightly from a year ago. Exports fell on a year-on-year basis, but imports fell more. The big mover was imports of industrial supplies which fell -16% year-on-year. Overall, the trade war doesn't seem to be fixing this deficit.
The final US Q2 GDP data released overnight didn't change the earlier reported +2.0% rise, but it did throw some light on the downturn in business spending which has been blamed on the 15-month trade war with China. The soft investment and sluggish profit results raise doubts about future jobs growth and therefore the American consumers’ ability to continue driving the economy.
Pending home sales in August rose +1.6% in August over July, and are now +2.5% higher that the same month a year ago. But the gain was less than markets were expecting and the trade association now thinks 2019 will come in less than +1% over 2018. Flagging new home construction is holding them back, they say.
The next Fed region district to report factory activity is Kansas City, and their survey was soft in September. Tariffs were cited as a key reason.
In Mexico, their central bank cut its benchmark policy rate by -25 bps to 7.75%, the second successive cut. It comes as their inflation rate cools, and their economic growth starts to waiver.
In China, their banking regulator is accusing banks of "hiding profits" by maintaining excess provisions. It said if it finds provisioning greater than 300% of non-performing loan balances, it will force those banks to distribute that excess as a dividend to shareholders.
In Australia, the real estate industry is backing their Government in an effort to roll-back ASIC's prescriptive restrictions on assessing borrower's financials which they say is disqualifying house buyers unnecessarily.
The UST 10yr yield has slipped today to 1.69%, down -3 bps from this time yesterday. Their 2-10 curve is still positive at +4 bps. Their negative 1-5 curve is narrower at -21 bps. Their negative 3m-10yr curve is much narrower at -12 bps. The Aussie Govt 10yr is down -1 bp to 0.96%. The China Govt 10yr is at 3.15% and up +1 bp. The NZ Govt 10 yr has firmed to 1.15%, also a +1 bp shift overnight.
Gold is up +US$3 to US$1507/oz.
US oil prices are little-changed today at just under US$56.50/bbl. The Brent benchmark is just under US$62.50.
The Kiwi dollar has risen back somewhat this morning, back up to over 63 USc. On the cross rates we are higher too at 93.3 AUc. Against the euro we are up to 57.7 euro cents. That puts the TWI-5 back up to just on 68.6 and its highest in more than a week.
Bitcoin is now at US$7,923 and another -5% drop from this time yesterday. Remember, this price was over US$10,000 on Monday, so that is a loss of -US$2,109 or -21% in five days, a real bear market now. 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 ».