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Here's our summary of key events overnight that affect New Zealand, with news of how to make a second-rate trade deal.
Japan and the US have today signed a bilateral trade deal, apparently a "phenomenal victory" for American farmers according to the US. But the facts show it is a deal that is worse than the one the US would have had if it had signed the TPP deal. The US gets nothing on dairy products, nothing on rice, nothing on cars, and only gets the same deal TPP members get on beef. It does get tax-free access for its tech giants but the irony is that it won't get any benefit from it. Japan keeps its car access to the US and gets tariff-free access for its machine tools.
This comes as the Chinese and Americans are about to resume their trade-war talks and expectations of a real deal seem slim.
Meanwhile in the real economy, American rail cargo stats continue to make unsettling reading. September traffic levels were down -7% year-on-year and a bigger fall than the -4.6% in August and July. That industry is calling it a 'recession'.
This data comes after trucking companies cut payrolls for the third straight month in September.
Still, Wall Street was posting minor gains today with the S&P500 up +0.2% in early afternoon trade although it has fallen back into negative territory near the close and is now down -0.5%. Overnight European markets were up about +0.7% and today will see the resumption of trading in Shanghai and Hong Kong after holidays. Yesterday the ASX200 also managed a +0.7% gain even though much of the East Coast was on holiday, while the NZX50 was up +0.8%.
In China, retail sales over the holiday period were up +8.5% year on year, but that rise was less than the +9.5% rise in 2018. And there is debate about the nature of the spending with some seeing it twisting to cheaper products. For example, instant noodles are up very strongly and at the other end of the scale sales of cars have taken a heavy hit downward.
The UST 10yr yield is up +2 bps at 1.55%. Their 2-10 curve is positive at +9 bps. Their negative 1-5 curve is wider at -27 bps. Their 3m-10yr curve is unchanged at -22 bps. The Aussie Govt 10yr is down -2 bps at 0.88%. The China Govt 10yr is unchanged at 3.16% but will resume trading later this morning after their week-long holiday. The NZ Govt 10 yr is now at 1.02%, and a -1 bp dip this morning.
Gold is down -US$4 to just under US$1,500/oz.
US oil prices are firmer today at now just over US$53/bbl. The Brent benchmark is just under US$59.
The Kiwi dollar is lower this morning, now at 62.9 USc. On the cross rates however we are still at 93.4 AUc. Against the euro we are at 57.3 euro cents. That puts the TWI-5 at just on 68.5.
Bitcoin is now at US$8,263 and that is up +3.4% 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 ».