Here's our summary of key economic events overnight that affect New Zealand with news of a big bump in the road today.
Worries about spreading contagion from troubles in China’s property market is sending global equity markets into their steepest decline in months.
But the sentiment fall is broad, affecting currencies, interest rates, and commodities.
Meanwhile, Canada is voting today in Federal elections that could well tip their internationally-popular prime minister out of office on the basis that he has been ineffective at home. Canada's currency is falling.
And the market sell-off comes as both Japan (Old Age Day) and China (Mid-Autumn Festival) have had long holiday weekends. But that has not stopped angry investors in property developer Evergrande turning out to continue their besieging of the company's offices, even holding some managers hostage. The firm can't sell assets fast enough to service its impending bond payment obligations. The company blamed "ongoing negative media reports" that "have dampened the confidence of potential property purchasers". There is no sign yet of a Beijing bailout.
China's central bank is to issue a regular policy statement tomorrow and it may move to try and quell the crisis. The US Fed will be watching closely too, and they report in next on Thursday.
Elsewhere in the world there was not a lot of economic data released, but one lone bit deserves attention - German producer prices. They rose much more than expected in August, and are up +12.0% from a year ago. The month-on-month rise from July was at an even faster pace. German industry hasn't faced pressure like this in almost 50 years.
A good part of those cost pressures are from freight in the global supply chains, and that is not easing off with the Baltic Dry index rising yet again, now at a new 12 year high.
But there are reports that the iron ore price fell almost -10% yesterday alone, especially on futures markets.
Separately, just how far Hong Kong has slipped down the Beijing rabbit hole is revealed as Hong Kong police seized goods intended for prisoners held on democracy charges on the basis that M&Ms and baby powder were "security risks" "inciting subversion".
In Australia, RBA analysis suggests climate change could cut property prices across a major part of Sydney’s northern suburbs with many homeowners there facing declining equity in their houses and rising insurance costs.
And staying in Australia, there were another 935 new community cases in NSW reported yesterday with another 826 not assigned to known clusters, and these numbers are lower than recently. They now have 13,604 active locally acquired cases. Victoria reported another 567 new cases yesterday, so worse there. Queensland is reporting zero new cases. The ACT has 30 new cases again. Overall in Australia, more than 47% of eligible Aussies are fully vaccinated, plus 25% have now had one shot so far.
However, anti-vax agitation is apparently rife in building trades union ranks, bursting into rowdy protest in Melbourne yesterday.
The sharp drop the weekend futures market suggested might happen on Wall Street has happened. The S&P500 is down a major -2.2% in afternoon trade to open their week, and falling. Overnight, European markets fell hard, with Frankfurt down -2.3% and London down -0.9% to bookend their Monday trading. Yesterday, both the very large Tokyo market and the Shanghai market were on holiday, saving them the embarrassment. But Hong Kong traded and fell a sharp -3.3%, driven of course by Evergrande. Locally, the ASX ended yesterday down -2.1%, while the NZX50 got away relatively lightly with only a -0.4% fall.
The UST 10yr yield opens today at just over 1.31%, down -5 bps from this time yesterday. The US 2-10 rate curve is flatter at +110 bps. Their 1-5 curve is flatter too at +75 bps, while their 3m-10 year curve is much flatter at +125 bps. The Australian Govt ten year benchmark rate starts today at 1.25% and down a very sharp -8 bps. The China Govt ten year bond is at 2.89% and unchanged. The New Zealand Govt ten year is now at 1.91% and up +2 bps.
The price of gold will start today at US$1763/oz and up +US$9.
But oil prices have drifted another -US$1 lower overnight so in the US they are now just under US$70.50/bbl, while the international Brent price is now under US$73.50/bbl.
The Kiwi dollar opens today at just on 70.3 USc and little-changed since this time yesterday. Against the Australian dollar we are just under 97 AUc. Against the euro we are just on 59.9 euro cents. That means our TWI-5 starts today at 73.7 and now below the top of the 72-74 range of the past ten months.
The bitcoin price has fallen today and hard, now at US$44,055 and down -7.1% from this time yesterday. Volatility in the past 24 hours has been extreme too at just under +/- 6.2%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».