Here's our summary of key events over the weekend that affect New Zealand, with news the Americans have killed the World Trade Organisation dispute resolution process.
But first in the US, consumer inflation expectations blipped up to +2.5% and that adds to the expectation that the US Fed will hold its policy position next week. But they will be keeping an eye on the decline in household spending growth as this survey had it diving to just over the inflation result. It is at its lowest reading since September 2017, and it is considerably below its 12-month average of 3.3%. The decline was broad based across age, income and education groups.
After a tough September, building permits in Canada were expected to rise. But they didn't. In fact October is the fifth consecutive month where the number of residential building permits declined. But at least they are up from the same month a year ago, even if only marginally. It was a tougher story for Canadian housing starts, with November starts -9.5% lower than the same month a year ago.
In China, another local government infrastructure investment agency has failed to pay bond interest. They will default if it is not paid within the 10 day grace period. They aren't the first. China’s bond market has seen a wave of defaults since last year. Chinese corporate bond defaults hit a record high in 2018, and are expected to break the record this year as businesses struggle with cooling economic growth.
And the latest data on China car sales is tough too. Their car market is struggling in a downward spiral, with passenger car sales falling for a fifth consecutive month in November, down -4.2% from the same month in 2018, amid their economic slowdown.
In Europe, the Sentix investor confidence survey improved for a second straight month to its highest level since May, and business expectations were the strongest in nearly two years. Analysts had expected both measures to worsen.
In Australia, their housing markets are 'on fire' so to speak. There were 2,837 homes taken to auction across the combined capital cities this week, returning a preliminary auction clearance rate of 74.5% and that was the busiest week of the year. The equivalent week last year had only a 41% clearance rate. In Sydney, the clearance rate was over 78%, boosted by a rush of buyers and a shortage of listings.
At the WTO, the Americans have killed the international dispute resolution court. They liked the decisions that went their way, but the American Administration can't stand that some didn't, so accused it of 'overreach' and have effectively ended support of the dispute resolution process.
The UST 10yr yield is at 1.83% and down -1 bp overnight. Their 2-10 curve is little-changed and positive at +20 bps. Their 1-5 curve is also positive at +10 bps. Their 3m-10yr curve is less positive +29 bps. The Aussie Govt 10yr is at 1.14% and a -1 bps dip from this time yesterday. The China Govt 10yr is unchanged at 3.23%. The NZ Govt 10 yr is now at 1.56%, up another +7 bps from this time yesterday.
Gold is now at US$1,460/oz and up +US$1 overnight.
US oil prices are down slightly to just under US$59/bbl. The Brent benchmark is now just over US$64/bbl. This takes them off their 3 month highs.
The Kiwi dollar has stabilised high at 65.5 USc. On the cross rates we are holding at 95.9 AUc. Against the euro we are at 59.2 euro cents. That puts the TWI-5 little-changed at 70.7.
Bitcoin is a little lower, now at US$7,425 and a -1.4% dip. 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 ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.