US data weak although house sales pick up; Canada on hold; China SOE bond issuance jumps; Australian consumer sentiment falls; UST 10yr yield under 1.77%; oil drops and gold unchanged; NZ$1 = 65.9 USc; TWI-5 = 71.1

US data weak although house sales pick up; Canada on hold; China SOE bond issuance jumps; Australian consumer sentiment falls; UST 10yr yield under 1.77%; oil drops and gold unchanged; NZ$1 = 65.9 USc; TWI-5 = 71.1

Here's our summary of key economic events overnight that affect New Zealand, with news of more evidence economic momentum in 2020 is hard to find.

In the US, the Chicago Fed's National Activity Index is pointing to slower growth in December.

The slowing American economy is still requiring Fed support. To start the week they were back with US$50 bln in overnight repo activity. It is now regular activity that markets are assuming replaces the more usual QE policy.

The American residential real estate market activity picked up a little in December with sales volumes up +3.6% in December from the annualised rate in November. But year-on-year there was zero gain even if it is near a two year high. Median prices however were up +7.8% on that annual basis. American mortgage interest rates have been little-changed recently at about 3.65% (plus points), although that is down from 4.45% a year ago.

The Bank of Canada had a rate review overnight and kept its policy rate at 1.75%. But they downgraded their growth forecasts for 2019 and that weakness is expected to spill over to 2020 and they now only expect +1.6% growth this year.

And Canadian consumer prices rose +2.2% in December, the same annual rate of increase it posted in November. A year ago, that CPI rise was +1.8%. Their 'core inflation' is currently running at their target 2.0%.

Later in yesterday's equity trading sessions, Asian markets got much more positive, rising from the start of sharp declines to post significant gains. It was an impressive turnaround. Shanghai started off down -1.2% but ended up +0.3%. Hong Kong started flat and ended up +1.3%. Tokyo started lower and ended up +0.7%.

None of that carried on into European markets and they were all about -0.5% lower overnight. Wall Street has split the difference and is currently flat in early trade, with the S&P500 up just a whisker.

Japan department store sales were down -5% year-on-year in December but that was 'better' than the -6% drop in November.

And it is not only the US Fed that is pumping in economic support liquidity. Chinese local governments have announced more than ¥800 bln bond issuance in January, more than double the amount in the same period last year and the third highest one-month issuance since 2018.

In Australia, consumer sentiment as measured by the Westpac-MI index is down sharply again. It is now near GFC lows. It is a similar result to the weekly ANZ-Roy Morgan index. By any measure, Aussie confidence is on the skids and the bush-fire situation isn't helping. It was enough for a large retailer to pull out of Australia, even before it officially opened it doors and after investing about AU$½ bln.

The UST 10yr yield is a little softer today at just under 1.77%. Their 2-10 curve is still at +25 bps. Their 1-5 curve is at +4 bps. And their 3m-10yr curve is still at +24 bps. The Aussie Govt 10yr is at 1.11% and down -2 bps from this time yesterday. The China Govt 10yr is starting to realign lower and is down another -3 bps at 3.07%. And the NZ Govt 10 yr is also down -3 bps at 1.53%.

Gold is unchanged at US$1,557/oz.

US oil prices are down sharply today to under US$57/bbl while the Brent benchmark is lower at just over US$63/bbl.

The Kiwi dollar is softer today at just on 65.9 USc. On the cross rates we are unchanged at 96.4 AUc. Against the euro we are marginally lower at 59.4 euro cents. That puts our TWI-5 down to just on 71.1 and a one month low.

Bitcoin is again little-changed from this time yesterday at US$8,651. 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 ».

Our exchange rate chart is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Story of the day was Greta stating science, vs Trump blithering optimism.

Said it all, really.

The question now, is whether the populace(s) are ignorant enough to back the latter

Science, possibly yes. Efficiency, definitely no.
The fact of the matter is that your new messiah's plan is plain hypocrisy - it is inaction on par with those she seeks to chastise. Attacking the lowest polluters whilst ignoring the highest.

The story of the day is not science vs optimism. It is, as Niall Fergusson alludes, saddling the burden of cost of a public good on the lowest polluters. Ultimately, incentivising greater pollution from the heavily polluting countries.

https://twitter.com/nfergus/status/1219647822791946241

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Of course they are PDK. Worse they are not ignorant -the majority are in denial, particularly if they are somewhat well off. Trump is telling them what they want to hear, not what they need to hear so he's their Pied Piper. They haven't realised that he's leading them off a cliff. Classic human condition!

Yes indeed. History contains only failed societies. This time - for the first and only time, we're running the idiotic 'grow as fast as you can, the resource supply is infinite' story a global level. My retired energy-Prof mate even reckons there won't be enough concentrated energy for a re-boot.

But we're full steam ahead for economic growth. must have that growth. My old man was onto it - used to say that you'd expect half the folk you come across will be below average - but he reckoned it was worse than that........

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History is on the side of Trump. If one listened to the pessimists the US would have ready run out of oil and gas decades ago and the UK would have been uninhabitable by 2000 etc. etc.
The Long History of Eco-Pesimism.
"Needless to say, climate Armageddon is just one among many predicted environmental catastrophes that somehow failed to materialise. Indeed, such prophecies of doom have almost always accompanied the development of disruptive technologies over the past two centuries.
..."At the root of eco-pessimism, then, is always a deep-seated disillusionment with technological , economic and social progress. So faith-like is the disillusionment, so ingrained is the misanthropy, that no amount of good news can dispel them."
https://www.spiked-online.com/2019/10/25/the-long-history-of-eco-pessimism/

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If Greta stopped skipping class she'd learn about the climate. Scientists don't know the impact of CO2, but data suggests an effect not a cause.

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Really? Strange that most scientists say otherwise.

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Poor Greta, is nothing more that a ill-informed puppet.

In believing that Credit Swiss is evil for investing in fossil fuels, shows she doesnt understand the current global reliance on fossil fuels.

If we stopped using them overnight it would be war!

She probably thinks CO2 is a poison

She would do well to watch this https://www.youtube.com/watch?v=X2q9BT2LIUA

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Yes watching YouTube clips will educate us all....face Palm!

https://en.wikipedia.org/wiki/Richard_Lindzen

frazz ***facepalm***, frazz.

... great link : thank you .

( p.s. .. what is frazzie's " face palm " ... a new mobile phone , or a Facebook app ? )

You guys are on fire this morning ( slow clap)

Quotes by Richard Lindzen
Climate Myth What the Science Says
""We’ve already seen almost the equivalent of a doubling of CO2 (in radiative forcing) and that has produced very little warming""
25 July 2012 (Source) - This argument ignores the cooling effect of aerosols and the planet's thermal inertia.
"If I’m wrong, we’ll know it in 50 years and can do something."
30 April 2012 (Source) - A large amount of warming is delayed, and if we don’t act now we could pass tipping points.
...one can see no warming since 1997."
22 February 2012 (Source) - Global temperature is still rising and 2010 was the hottest recorded.

My point was more along the lines of the irony on your part.
You jump to the defense of Greta, who last time I checked doesn't have any science background, yet deride those who watch YouTube clips from a Professor of Meteorology

The problem with you is that Greta's message is to read science and do something today (everyone can). Your retired Professor of Meteorology has some interesting views..which need to be taken in context to his overall research. Also, jumping to her defence as too many misogynists comments on this site. Grow up..

" The problem with you ... "

... why choose to attack or to denigrate a fellow poster , who has a different view point ... since when it is a problem to have alternative thoughts ... outside of the PRC , that is ..

I'm sorry, but no it isn't.
Greta's message is to listen to her.

From her speech:
Since last summer, I've been repeating these numbers over and over again in almost every speech. But honestly, I don't think I have once seen any media outlets or person in power communicate this and what it means. I know you don't want to report about this. I know you don't want to talk about this, but I assure you I will continue to repeat these numbers until you do.

That's not saying "read science". That is saying "repeat what I say".

Richard Lindzen, an outspoken climate contrarian and retired Massachusetts Institute of Technology professor, sent a letter last month to President Donald Trump urging him to pull the United States out of the United Nations' climate change regime because global climate action is "not scientifically justified."
After MIT's climate researchers and faculty found out, they wrote their own open letter to the president, setting the record straight.
http://climate-science.mit.edu/news/featured-stories/mit-faculty-working...

... if just one lemming questioned the consensus of the merits of everyone jumping enmasse off the cliff , they wouldnt all arrive at the bottom requiring great quantities of lemming aid ....

He also was an early member on the IPCC

The climate charge alarmists like yourself will look to discredit anyone who has a different view

And all the science mentioned in the video is not disputed, the reason I posted the video is because is easily lays out the complexity of the climate on this planet. And everybody should understand that complexity before shooting their mouths off.

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... the new messiahs in the medical world are statins .... Lipitor alone has earnt Pfizer over $US 200 billion in worldwide revenues since 1996 ... and there are others .... all being prescribed by doctors because cholesterol is bad ... everyone knows it is ... the consensus says so ...

Except ..... they are wrong , dead wrong ... not only do statins have horrendous side effects ( liver damage being just one of many ) ... but cholesterol is a vital lipid ... it's a fat produced in every cell of every animal's body .. it keeps cell walls flexible ... we'd die without it ....

.... and I do wonder if there isn't a parallel here with CO2 ... . expert consensus say it's a bad thing .... Scoldilocks shrieks at us that we must stop emitting it immediately .... and yet the entire plant kingdom are hoovering it up daily by the mega tonnes ... its vital ... a core chemical to life on earth .... we'd die without it . .

No CO2 = no plants converting CO2 to Carbohydrates = no animal life = no Human Life

No-one is arguing for complete removal of all CO2 from the atmosphere. You've barely even formed this straw into a vague representation of a man.

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I agree. Personally I think her speech has only helped her detractors.

It clearly was not written by her, and I doubt she understood most of what she was saying. It was overly emotive and came across more as a rebuttal for the holes picked in her previous grandstanding. No scientific evidence, no plans for a transition, and no real action.

Basically her message is Ban carbon emissions cos they are bad - Hardly the sign of someone educated/informed in what they are talking about.

If these Enviro-radicals really are the "Leaders" they are claimed to be. Then they need to step up and LEAD. Give up the convenient shelter, power, food, and travel provided by CO2. Go back to a pre-industrial self-sufficient lifestyle and SHOW the world how it can and should be done.

Greta Thunberg: "Hey, people...we need to listen to the scientific community on this issue."

Old men in power: "How dare she? Who does she think she is?!?"

nah, the old men are rubbing hands together, they are going make unbelievable fortunes
https://www.pscp.tv/w/1yoKMBMPeNnGQ?t=1m8s

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But we still ignore the elephant in the room. China is opening a new coal fired generator a week, they account for %60 of new CO2 emissions since the climate accord. Then there is India on the same path.
We are wasting our time as China is just doing what is in it's own interest.

https://johnhcochrane.blogspot.com/2019/11/climate-clarity.html?m=1

India

https://www.hindustantimes.com/mumbai-news/carbon-dioxide-emission-from-...

per head we are worse but as they chase our standard of living there is very little that can be done.

https://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissi...

As my old man was fond to say “farting at thunder” then.

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PDK should start a re-education camp for people with such views which don't toe the official position.

Te Papa?

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... the problem for climate change/global warmers is their absolutist belief ... and if you dare to criticize their dogma , they have a mental meltdown , get emotionally wound up ...

But , good science is always open to being proven wrong ... which is why it succeeds and endures .... it can tear down and rebuild ...

... absolutists can't ... there is only one way... theirs' ...

Pseudo-moralistic & stances there of:

https://youtu.be/qTk-69f64KU
Jordan Peterson.

Projection.

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@pdk ..........I spent a month and a half in the US and visited 7 states . We have family in Florida , Massachusetts , and Montana , and we attended a family wedding , and spent a few days with an academic associate of my wife and her Law professor husband in San Fran on the way back to NZ .

My take away is that Trump is widely liked in America , even our family who are all skilled professionals, (the Montana relatives who are cattle farmers) are Trump supporters .

The SF academics are not , but did acknowledge that the economy is doing well , and that they do have a problem with illegal migrants.

And Americans like to feel optimistic , even if Trump is a bit OTT , they seem to enjoy his optimism .

Back in NZ reading the Herald and watching TVNZ , one would have thought that they were being paid to campaign against Trump, and create the impression Americans hate him ............its simply not true .

Our media is so far out of touch with middle American thinking , its unbelievable.

I would bet on Americans re-electing him in November

The circumstances that elected Trump 2016 still exist and will re-elect him 2020. And because of this fools errand of an impeachment the GOP likely will eventually end up with control of both houses again. The USA is the powerhouse of the world. Ten states have economies in their own right larger or as large as Russia. NZ’s is only just the size of that of Phoenix AZ. All the sniping from abroad, whether right or wrong, ain’t going to change a damn thing about America doing its own thing at election time (with or without Russia, of course.) To echo my earlier post our relative media negative comment is just farting at thunder.

I agree, the voters gave the fingers to what they saw as a fundamentally corrupt system that only seeks to protect and preserve the power of the politicians, so the voted in probably the most corrupt of them all, but essentially a rank outsider. The proof of the corruption is ever more clear through the impeachment process and trial.

My question is would the right independent candidate stand a chance of winning a presidential race in the US?

I think the GOP is just too destructive and ruthless. Just think back to how Bush junior with a highly suspect service record was able to demolish both McCain and Kerry in part, both highly decorated veterans, by effectively attacking those same war records. Americans live amongst corruption night and day. Hamilton said at the beginning of it all that corruption had been sewn into the very fabric of the constitution.An old catchphrase, the only difference between a Republican and a Democrat administration is that, during the latter, the poor are allowed to be corrupt too.

& ps. There is an irony in your question too. The Republicans deeply feared in 2016 that if Trump did not get their nomination he would stand as an independent, thus splitting the vote, and letting the Democrats to retain power at a canter. It’s all about power, getting it counts for everything.

Trump's not all bad. For a starter, he's not a war monger like most former presidents.

Remember the bright line test, well that's now a benchmark that's being applied retrospectively up to 7 years ago.
https://www.stuff.co.nz/business/118961210/inland-revenue-slaps-property...

Enjoy your tax bill.

Traders dodging tax.. how unusual. IRD catching up with them, good. Beyond the brightline remains the foggy area of intent which still matters. If it was purchased for trade, then its still a taxable profit.

Wuhan suspends all flights and trains . Year of the Rat.

"No worry. We have under control."

WHO emergency meeting live feed https://www.youtube.com/watch?v=fHVU3GIr23Y

Vast, vast sprawling country with great dense population centres dotted here & there on the landscape. Hard to keep control of obviously. Even the USA with the giant bureaucracy of FDA & USDA cannot prevent outbreaks stemming from food sources. Tyson’s chicken, romaine lettuce for instance. But when it goes viral mammal to mammal, that is something else again isn’t it.

Niall Ferguson

I don't see her in Delhi or Beijing

https://www.zerohedge.com/geopolitical/i-dont-see-her-beijing-or-delhi-n...

Both countries would no doubt deny her entry.. - don't see Neil in Beijing either?

"Both countries would no doubt deny her entry". Therein lies the problem. If the climate change activists don't address the monstrous elephants in the room, theyre wasting everyones time

.. why should Niall Ferguson be seen in China ...

Greta Thunberg is the anti CO2 campaigner .... in her lifetime 60 % of mankind's added CO2 has come out of China ...

She ought to sail over there , and aim her message directly at them.... the planets greatest emitters ...

Liberals can't criticize China. It's *racist*

The slowing American economy is still requiring Fed support. To start the week they were back with US$50 bln in overnight repo activity. It is now regular activity that markets are assuming replaces the more usual QE policy.

The non-QE4 program continues along side the stipulated net RP purchases. Latest tabled evidence

Jordan Peterson comments.
(What to do next)

https://youtu.be/pBbvehbomrY

Eco anxiety.
Sky news.
Believing the world is going to end like GT, is an "enormous psychiatric blow".

https://youtu.be/lXXbisbra1g

https://youtu.be/E1cP5hdPxLg

Things that make you go hmmm

'China just put in over $300 billion dollars of emergency liquidity injections through 14 day reverse repos in less than 2 weeks. And Beijing ordered a credit increase in the economy of $4 trillion minimum for 2020. Their credit Ponzi scheme is growing way faster than the US. Jason Burack'

Now they are starting to use the B/s against the West including us, while the elite stand to make fortunes, unheard of wealth.
https://www.aljazeera.com/ajimpact/davos-world-prepare-millions-climate-...

Exactly - the "free trade" group think nonsense rolled over after the FIRE industry put it's hands too deep in our pockets. Now this.

Davos, 50th anniversary. The absurdity never ends.
https://www.globalresearch.ca/wef-celebrating-50th-anniversary/5701359

Good article over at Der Spiegel re the 50,000 year long history of Australian 'firestick agriculture', and its lessons for the current crop of pollies and managers. Strapline: "What Australia needs is more fires, but the right kind'

Japan department store sales were down -5% year-on-year in December but that was 'better' than the -6% drop in November.

For the Japanese economy as well as the whole global system, another confirmed downturn no matter how much longer it lasts is that economic pit of despair getting bigger and bigger. Neither the island nation nor any other nation can really afford to squander several more years waiting for actual rather than imagined temporary successes. Link

ICYMI: One of Australia's biggest lenders, the ANZ, has cut a key deposit interest rate to just 0.05 per cent as markets prepare for the Reserve Bank to take the official cost of cash to an all-time low https://www.smh.com.au/politics/federal/anz-cuts-deposit-rates-to-all-ti...

www.shakingmyhead.com.au