Subscribe to our daily podcast here.
Here's our summary of key events overnight that affect New Zealand, with news markets are more comfortable with risk today.
Firstly in the US, consumer inflation was unchanged in September at +1.7% with the core measure without food and energy at +2.4%. Both were lower than expected and gave markets the view that this will encourage another Federal Reserve rate cut.
Wall Street is up again today by about +0.7% which reduces its October decline to just -1.3%. This follows rises closer to +1% in Europe overnight and Shanghai gains of +0.8% yesterday. Japan and Hong Kong weren't as positive however. And both the ASX200 and NZX50 fell yesterday.
But the underlying reason for the market rise, modest as it might be, is that senior Chinese officials have now joined the trade talks and the US President is respecting them with a planned meeting. Respect goes a long way with the Chinese. Now the goal in these talks has been reduced to a "mini-deal", some sort of resolution seems more likely.
And Apple is kowtowing to Chinese wishes, denying Hong Kong protesters access to an app they use in their protest activities.
In a new report, the World Bank says growth in developing East Asian and Pacific economies is expected to slow from 6.3% last year to just 5.8% this year and only 5.7% and 5.6% in 2020 and 2021, respectively, reflecting a broad-based decline in export growth and manufacturing activity. For the first time in thirty years, they say China's growth will be under 6% in 2020 and down from 6.1% this year.
In Europe, they have pared back their list of "non-cooperative tax havens" to just 11 countries, removing Switzerland and the UAE. Of the 11 still on it, six are Pacific Island, three are Caribbean islands, and two are in the Middle East. None are European so the "Dutch double sandwich" is safe. Being weak economically seems to be a key criteria for being on this list.
In the UK, hopes are rising that a resolution to the Irish border questions in Brexit may be available.
The UST 10yr yield is up another +7 bps to 1.65%. Their 2-10 curve is positive at +14 bps. Their negative 1-5 curve is much narrower at -14 bps. Their 3m-10yr curve has almost disappeared at just -5 bps. The Aussie Govt 10yr is up +7 bps at 0.97%. The China Govt 10yr is up +2 bps at 3.14%. The NZ Govt 10 yr is now at 1.07%, and a +3 bps rose this morning.
Gold is down -US$9 to US$1,496/oz.
US oil prices are slightly firmer today at now just over US$53/bbl. The Brent benchmark is over US$58.50.
The Kiwi dollar is firmer this morning, now at 63.3 USc and up the thick end of +½c from this time yesterday. On the cross rates we are unchanged at 93.5 AUc. Against the euro we are at 57.4 euro cents. That puts the TWI-5 at just on 68.7.
Bitcoin is unchanged at US$8,537. 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 ».