Subscribe to our daily podcast here.
Here's our summary of key events overnight that affect New Zealand, with news investors can't seem to escape bad data, even as expectations rise that monetary and fiscal authorities will act soon.
Overnight there were two surveys out taking the temperature of the giant American services sector. The international one found little change from August but sees it barely expanding. The more widely watched one found the expansion falling back quite sharply and the gap between the two has narrowed a lot. American analysts have been surprised by the extent of the fall.
Those analysts expect non-farm payrolls to rise marginally from the low August result when this data is out tomorrow morning. These expectations are not very high because this would be the third lowest rise since 2017 and those previous lows involved storm disruptions or government shutdowns. This payrolls data has the equity markets awaiting the signal and the S&P500 is posting a small gain so far today.
In Canada, following up Vancouver's positive housing market recovery, the Toronto realtors also say the are getting the same positive impact, even if the highs of 2016 haven't returned.
The European services sector is similar to the American one, now essentially showing a stalled state.
And the same survey in Germany was very downbeat which triggered a sharp selloff in the German equity markets. Last night the DAX was down -2.8%, a move that wasn't mirrored in other European equity markets. Most other equity markets were up modestly on the day, although London was lower again. In the UK, there is growing awareness their Brexit recession is upon them now.
Official data for EU retail sales released overnight wasn't too gloomy, although it was only for July.
In Australia, there were two services PMI reports out as well and both positive. The internationally-connected one was quite upbeat, reporting a rising expansion in September and a good rise in new orders. The local version wasn't quite so upbeat but it also reported a lift.
However none of this optimism saved their equity markets yesterday, with the ASX200 dropping an eye-watering -2.2% on the day. The negative vibe spread across the Tasman with the NZX50 down -1.2%. Local investors can read the US and European tea-leaves as well as anyone, and when China's markets return next week, news from there will almost certainly record a sharp adjustment lower as global trade falls bite everyone.
The UST 10yr yield is down another -6 bps to 1.53%. Their 2-10 curve is more positive at +15 bps. However, their negative 1-5 curve is wider at -28 bps. And their 3m-10yr curve is wider at -19 bps. The Aussie Govt 10yr is weaker at 0.91%, an fall of -4 bps. The China Govt 10yr is unchanged at 3.16%. The NZ Govt 10 yr is at 1.05%, a -1 bp slip from yesterday. There were sharp falls in our swap rates yesterday too taking them down to new record-low levels.
Gold has risen further today, up another +US$7 after yesterday's +US$19 rise and is now back up to US$1,508/oz.
US oil prices are lower yet again today, down to just under US$52.50/bbl. The Brent benchmark is just on US$57.50.
The Kiwi dollar is firmer today on a tallest-dwarf basis, now at 63.1 USc and up a full +½c. On the cross rates we are back up to 93.5 AUc. Against the euro we are at 57.4 euro cents. That puts the TWI-5 back to just on 68.5 and similar to where we were on Friday last week.
Bitcoin is now at US$8,184 and only marginally lower than 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 ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.