Here's our summary of key events overnight that affect New Zealand, with news New Zealand taxes are rising while globally they are stable.
International air passenger travel is holding up better than airfreight cargoes. In October international travel was up +3.2% from the same month a year ago and for the Asia Pacific region it was +3.8% higher. While these are slowdowns in growth, this expansion seems more resilient than the trade data.
The final durable goods orders data for October in the US has come in lower than their flash number, and that was unexpected. It has turned out to be -1.3% lower than in October 2018 and excluding defense orders they were down -2.3% on the same basis. This trend is not healthy. Shipments were lower as well.
All eyes in the US are now firmly fixed on tomorrow's non-farm payrolls report.
The Chinese have reiterated that US tariffs must be reduced to win their approval for a limited 'phase one' deal. Equity markets are faltering over the receding prospects on that front, despite other positive official words.
In Australia, retail sales were flat in October from September. Nationally they are up just +2.7% in a year when inflation is +1.7%, indicating low or stagnant retail growth. In Victoria, retail sales grew just +1.9%, in NSW it was just +2.1%. And in South Australia it was below inflation at only +1.6%. The 'best' result is in Queensland where they are up +4.4% in a year.
And fallout in Australia from the RBNZ Capital Review has been muted and nothing like the warnings given in advance. In fact, bank shares rose, with ANZ, the supposed worst affected, up by +2% after the release.
And their competition regulator is warning consumers about the downsides of customer loyalty schemes. Essentially they say these schemes benefit the companies, not their customer members who can get taken advantage of easily.
The OECD reported that New Zealand's tax revenues as a percent of GDP rose relatively sharply in 2018 to 32.7% and the fastest rise since 2010 when we raised the GST rate. Although our level is lower than the OECD average, that average is pumped up by high-tax European countries, so those benchmarks are not so relevant to us. We have a similar level as Canada, but well above the Aussie level of 28.5% and the US level of 24.3% (which dropped sharply due to some irresponsible cuts to taxes on the wealthy and companies). Japan is at 31.4%.
The UST 10yr yield now at 1.79% and a +1 bp rise since this time yesterday. Their 2-10 curve is marginally wider at +21 bps. Their 1-5 curve has more positive at +9 bps. Their 3m-10yr curve is also more positive +21 bps. The Aussie Govt 10yr is at 1.14% and that is back up +1 bp since this time yesterday. The China Govt 10yr is now at 3.21%, and unchanged. The NZ Govt 10 yr is now at 1.46%, and +6 bps rise.
Gold is down -US$1 to US$1,479/oz.
US oil prices are softer today to just on US$58.50/bbl. The Brent benchmark is just on US$63.50/bbl. But most of yesterday's big gain is holding.
The Kiwi dollar is higher again, now at 65.5 USc. On the cross rates we are higher too at 95.8 AUc and some analysts see it going higher yet. Against the euro we unchanged at 59 euro cents. That puts the TWI-5 up at 70.6. We should also note that the Chinese are letting their yuan depreciate slightly faster, presumably as they are now seeing less likelihood that a deal with the Americans is coming.
Bitcoin is softer today at US$7,453 and down -2% 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 ».