Here's our summary of key economic events overnight that affect New Zealand with news of a broad range of August data that shows the Chinese economy is slowing, and quite quickly.
But first in the US, industrial production rose as expected in August, up +5.9% from a year ago
And the latest Fed survey of factories in the New York region shows that growth as picked up, selling prices are still setting new record high levels, and these businesses have a very positive outlook.
In Canada, their CPI increased +4.1% in August and higher than the higher estimates. It is high enough now to become an election issue there.
In China, house prices rose +4.2% in August which was a little less than the July rise and probably on a track they want to see. But most of the other August data they released was weaker than they would like.
Chinese industrial production rose +5.3% year-on-year, well shy of July's +6.4% gain and the expected +5.8% in August. In fact the August gain was their slowest in more than a year.
Their electricity production came in virtually unchanged from August a year ago.
China retail sales underwhelmed even more, up just +2.0% when a +7.0% gain was expected because July rose +8.5%. So this is hard evidence their domestic economy is slowing fast.
China seems to be blaming the weather for these shortfalls.
They aren't the only Asian economy slowing. Data for Japanese machinery orders underwhelmed, although this is for July and seasonally-adjusted. The actual data was really quite positive and there is subsequent other data that suggests an August pickup.
The EU released industrial production data for July too, and that came in better than expected (+7.7%) although not quite the rebound recorded in June.
A new data point we should keep an eye on is the lithium price. It has been rising very strongly in 2021, but there is recent evidence that a mining supply-access frenzy is getting underway, especially in Australia and Canada.
In Australia, there was an OECD review of its economy and it had some pointed criticisms embedded in their glossy assessments, not the least of which were aimed at the RBA and its policymaking.
And locally, Air New Zealand has said it is in a two year partnership with Airbus to convert some of its domestic airplanes to fly on hydrogen, and thereby eliminating CO2 from its aircraft emissions.
Back in Australia, there were another 1259 new community cases in NSW yesterday with another 1118 not assigned to known clusters, so not much material improvement there. They now have 14,333 active locally acquired cases. Victoria is reporting another 423 new cases yesterday, so it is still tough there too. Queensland is reporting zero new cases. The ACT has 13 new cases again. Overall in Australia, more than 43% of eligible Aussies are fully vaccinated, plus 25% have now had one shot so far.
The Wednesday session on Wall Street has traded higher since its opening, with the S&P500 now up +0.8% in early afternoon trade. Overnight, European markets were mostly lower with Paris down -1.0% and London down -0.3%. Yesterday the very large Tokyo market fell -0.5%. And Hong Kong dived another -1.8%. Shanghai slipped another -0.2%, with building sell-offs. The ASX200 closed down -0.3% and the NZX50 Capital Index closed down -0.1%.
The UST 10yr yield opens today at just over 1.30%, so recovering +2 bps from this time yesterday. The US 2-10 rate curve is at +110 bps and marginally steeper. Their 1-5 curve is steeper too at +74 bps, while their 3m-10 year curve is steeper at +126 bps. The Australian Govt ten year benchmark rate starts today at 1.25% and back up +2 bps. The China Govt ten year bond is at 2.92% and up another +1 bp. The New Zealand Govt ten year is now at 1.79% and down -8 bps but most of that was yesterday.
The price of gold has fallen -US$15 today and now at US$1792/oz.
But oil prices have risen sharply overnight by about +US$2.50/bbl so in the US they are now still just under US$72.50/bbl, while the international Brent price is now over US$75/bbl.
The Kiwi dollar opens today at just on 71.1 USc and marginally firmer since this time yesterday. Against the Australian dollar we are unchanged at 96.9 AUc. Against the euro we are firmish at 60.2 euro cents. That means our TWI-5 starts today still at just on 74.1 and we are still right at the top of the 72-74 range of the past ten months.
The bitcoin price has risen again today, now at US$48,067 and +3.2% higher than this time yesterday. Volatility in the past 24 hours has been moderate at just over +/- 2.3%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».