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Here's our summary of key events overnight that affect New Zealand, with news of slowing economic growth and rising debt.
But first up this morning, we can report the results of another dairy auction and again, there was little overall change. Prices were marginally higher in US dollar terms , marginally lower in New Zealand dollar terms. Quantities sold were almost identical to the prior auction. Of note however is that skim milk powder prices rose again, this time by +2.4% and taking them to their highest level in more than four years. SMP is a core ingredient for the global baking industry.
The IMF now says the global economy is growing at its slowest pace since the GFC with overall growth expected to be just +3%, down from its +3.2% forecast three months ago and down from the +3.7% forecast it made at this time last year. It blamed key policy mistakes around trade, tariffs and Brexit, all themselves mistakes from shallow short-term populism. The pullback is driven by slowing advanced economies who overall are expected to grow by just +1.7% in 2019. They see New Zealand growing +2.5% in 2019, the fastest of their "Advanced Asia" group. They slashed the Aussie growth to just +1.7% from +2.7% in 2018. As they say, there is now no room for more policy mistakes, and things will only get worse unless changes in policy direction are made.
On the trade war front, China is now saying more agricultural product purchases from the US depends on the US rolling back tariffs already imposed, not just holding them from going up again. Then it will spend the promised US$50 bln buying.
In the US, Wall Street is up more than +1% as some key corporate earnings reports have come in better than expected.
And on the Brexit front, the EU and England are moving closer to agreeing to a plan for the UK to leave the bloc, with a deal "possible but difficult" by tomorrow. This optimism has seen the English pound rise. It is not clear whether this will require an extension however.
In Canada, their housing market is rising sharply again. The number of home sales in September rose 15% compared with a year ago, as sales in the country's big cities climbed higher.
China's September CPI rose +3.0% year-on-year, boosted by high meat prices (especially pork) and high prices for fruit. Pork prices were up +70%, beef was up +19% and lamb up +15%, eggs up +8%, chicken +6%. Milk however was up only +1.1%. Vegetables were down -11%. TCM was up +5.2% and Western medicine services were up +4.7%.
And China's debt growth turned sharply higher in September. Banks loaned a remarkable +24% more than analysts were expecting, and +40% more than in August. Now that is a true debt binge.
In Australia, Latitude's greedy IPO has been called off.
The UST 10yr yield is up today by +4 bps at 1.76%. Their 2-10 curve is positive at +14 bps. Their negative 1-5 curve is back down to just -5 bps. Their 3m-10yr curve has disappeared, now at 0 bps. The Aussie Govt 10yr is unchanged at 1.04%. The China Govt 10yr is down -1 bp at 3.18%. The NZ Govt 10 yr is now at 1.18%, back down -3 bps since this time yesterday.
Gold is down sharply today, down -US$13 overnight to US$1,479/oz.
US oil prices are little-changed today at just under US$53.50/bbl. The Brent benchmark is just on US$59.50.
The Kiwi dollar is a little softer again today, now at 62.8 USc. On the cross rates we are at 92.9 AUc. Against the euro we are at 57 euro cents. That puts the TWI-5 at just on 68.2. Against the British pound, we are now below 50 UK pence and that is the first time in a year.
Bitcoin is lower at US$8,176 and down -2% overnight. 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 ».