Here's our summary of key events overnight that affect New Zealand, with news China's economy may be slowing but foreign direct investment there is rising.
But first in the US, their President and the head of the Federal Reserve had a sit-down meeting that has been described as cordial. But nothing untoward seems to have come out of the meeting.
China has signaled that it is unlikely to agree on the 'phase one' trade deal unless the Americans roll back tariffs. Expectations of a deal are now slimming.
Direct foreign investment in China rose +7.4% in October, and that comes after a +4.9% rise in September and a much larger rise in the June quarter. Foreign firms are investing in China and at a faster rate. And the data for China's firms investing offshore has turned positive again, after six of the eight previous quarters to March 2019 were declines.
And staying in China, their central bank unexpectedly trimmed a key interbank lending rate yesterday, the first cut of the rate in more than four years and a signal that Beijing is ready to act to shore up confidence following a string of weaker economic data. Markets now expect a prime loan rate cut of -5 bps soon to 4.2%.
They also said it will “increase counter-cyclical adjustment” to weight against downward pressure on their economy, and noted that inflation expectations are rising.
The WTO says that global flows of goods across borders are on course to grow at the weakest pace since the GFC as fallout from the US-China trade war and rising tariffs continue to crimp both exports and imports.
The UST 10yr yield is down -3 bps today and now at 1.81%. Their 2-10 curve is positive at +22 bps. Their 1-5 curve is weaker for the week at +11 bps. Their 3m-10yr curve is also less positive +24 bps. The Aussie Govt 10yr is unchanged at 1.16%. The China Govt 10yr is now at 3.23% and a -4 bps overnight retreat. The NZ Govt 10 yr is now at 1.41%, unchanged.
Gold is up +US$5 to US$1,473/oz.
US oil prices are lower today to just under US$57/bbl. The Brent benchmark is just over US$62/bbl. Both represent falls of more than -US$1/bbl.
The Kiwi dollar is holding at 64.1 USc. On the cross rates we are now just under 94 AUc. Against the euro we are at 57.8 euro cents. That leaves the TWI-5 at just on 69.2.
Bitcoin is softer this morning at US$8,405 and an overnight dip of -1.6%. 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 ».
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