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 ».