Here's our summary of key events overnight that affect New Zealand, with news Australia has had an embarrassing loss at the WTO.
This is the updated version of today's briefing. First, the US budget deficit in the year to November came in at a whopping -$1.022 tln and +16% deeper than at the same period a year ago. In fact this deficit is now more than double the level that the current Administration inherited three years ago (-US$496.6 bln).
And the US Fed delivered no surprises with its 'on hold' review, although it did note that while their economy is growing 'moderately' at present, "business fixed investment and exports remain weak". Neither bonds nor their currency reacted. The Fed seems to have no appetite to make any changes any time soon.
American consumer inflation came in marginally higher in November than expected at +2.1% and at the Fed's target. This is a rise from +1.8% in October. The higher levels are driven by medical costs which rose +5.3% in the year and rent which rise +3.3%.
And 'real' average hourly wages are unchanged in November from October - in fact they haven't shifted in four months. For the full year, real wages rose only +1.1% and that is the lowest rate of increase in more than a year.
Meanwhile, a final decision on new US tariffs on China, which are expected to be delayed, is now with the US president - and basically anything could happen. There is no 'phase one' deal despite ongoing talks. Mistrust is high.
China is in the news also as the world's largest jailer of journalists as they exert tougher controls on news and free thought. They beat out Turkey who had the 'honour' in 2018, and then Saudi Arabia and Egypt.
And in another sign global trade is slowing, airline profits are on course to fall faster than expected in 2019.
In Australia, consumer sentiment in November dropped rather sharply and is now -9% lower than this time a year ago. This result will disappoint their monetary authority as it come after their September rate cut and pre holiday spending (and post their big tax cut), and the expectation was that all these would have bolstered consumer sentiment. It is not the case, however.
And Australia has been exposed as an exponent of double standards when it comes to trade. The WTO has rejected how it protects domestic manufacturers with tariffs saying it applies its own rules unfairly. This case opens up a raft of new claims for access by a range of nations, including those that want to export steel to Australia. They are in for an uncomfortable, shifty time as they are revealed as only supporting free trade when it suits them.
The UST 10yr yield is at 1.81% and down -4 bps overnight. Their 2-10 curve is little-changed and positive at +17 bps. Their 1-5 curve is also positive at +12 bps. Their 3m-10yr curve is less positive +29 bps. The Aussie Govt 10yr is up +3 bps at 1.17%. The China Govt 10yr is -2 bps lower at 3.21%. However, the NZ Govt 10 yr is unchanged at 1.53% since this time yesterday.
Gold is now at US$1,471/oz and up +US$7 overnight.
US oil prices are lower today at now under US$59/bbl. The Brent benchmark is now well under US$64/bbl.
The Kiwi dollar is marginally higher today at 65.7 USc. On the cross rates we are slightly lower at 95.7 AUc. Against the euro we back up to 59.2 euro cents. That puts the TWI-5 firmer at 70.8.
Bitcoin is a little lower, now at US$7,183 and another -0.7% 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 ».