Here's our summary of key economic events overnight that affect New Zealand with news of some 'big moves' by some big companies on the climate front.
But first, remember the US and Canada are still on holiday today.
In China, eyes are on a resurfacing financial threat: bad loans in the property development sector. Developers expanded aggressively post-pandemic, but didn't factor in the impact of tougher lending and leverage rules, and that has sparked a liquidity crisis and missed debt payments for a number of large players. Policy makers are worried about a potential contagion.
In Singapore, a kind of regional poster-child for opening up, delta is getting them to change course with reimposed restrictions.
German factory orders were expected to be down -1% in July from June, but in fact they rose +3.4%, building on the prior month's healthy rise. Export orders were where the surprise gains came from.
And some of that rise comes from strong orders for electric cars. BMW said it has orders for NZ$33 bln in electric batteries, up more than +60% in just half a year. They claim they are just responding to customer order levels.
The price of aluminium continues to rise, now at a ten year high. A coup in the West African country, Guinea, a world-leading bauxite supplier, production cutbacks in China and India over lack of electricity, and fast-rising demand, have all contributed to the recent surge.
And we should note that News Corp, long obsessed with the ABC in Australia, has done an about-face after years of casting doubt on climate change and attacking politicians and other media who favoured corrective action, are now planning an editorial campaign advocating a carbon-neutral future! They are sensing they have lost this 'conservative battle'. This will leave its 'after-dark' commentators high-and-dry in Australia, with only anti-vaxxing Covid-denial left to prosecute.
In Australia, job ad levels in August fell -2.5% from July but that is off a high base. This indicator is holding up much better than last year, in line with other key indicators, such as consumer confidence. ANZ economist expectations are that activity should again rebound once restrictions ease so this weakness will be temporary.
But not everyone thinks the snap-back from the current lockdowns will actually happen, like the CBA head of Australian economics.
And staying in Australia, there were another 1281 new community cases in NSW yesterday with another 1267 not assigned to known clusters, so they remain completely out of control. They now have 24,805 locally acquired cases and NSW hospitals are bracing for a surge of patients. Victoria is reporting another 246 new cases yesterday, so it is still bad there too with a worrying new surge. Queensland is now reporting one new case. The ACT has 26 new cases. Overall in Australia, more than 38% of eligible Aussies are fully vaccinated, plus 25% have now had one shot so far.
The UST 10yr yield opens today at just under 1.33% and unchanged. The US 2-10 rate curve is at +112 bps and also unchanged. Their 1-5 curve is little-changed at +72 bps, while their 3m-10 year curve is still at +129 bps. The Australian Govt ten year benchmark rate starts today at 1.27% and up +2 bps from this time yesterday. The China Govt ten year bond is at 2.86% and marginally firmer. The New Zealand Govt ten year is now at 1.91% and up +6 bps in a day and its highest since March.
Wall Street is closed for their Labor Day holiday. The S&P500 futures are up a modest +0.2%. Overnight, European markets were firm and up an average of +0.9%. Yesterday, Tokyo rose a strong +1.8%, Hong Kong by +1.0% and Shanghai by +1.1%. The ASX200 closed flat and it was lucky to do that after being lower all day. The NZX50 didn't do much better, closing up just +0.1%.
The price of gold was softish yesterday, down by another -US$5 and now at US$1823/oz.
Oil prices have stayed slightly lower, so in the US they are still just under US$69/bbl, while the international Brent price has dipped to just under US$72/bbl.
The Kiwi dollar opens today at 71.4 USc and just marginally softer than at this time yesterday. Against the Australian dollar we are softer too at just under 96 AUc. Against the euro we are softer at 60.1 euro cents. That means our TWI-5 starts today at just on 74.1 and still above the 72-74 range of the past ten months.
The bitcoin price has risen +2.7% from this time yesterday at US$51,684 to levels last seen in May. Volatility in the past 24 hours has been modest at just over +/- 1.9%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».