Here's our summary of key economic events overnight that affect New Zealand with news investor risk sentiment continues to improve as the prospect for stronger interest rate rises.
More inflation data was reported overnight but it is clear there are two global tracks emerging, depending on the state of the economic recovery.
Canadian inflation has been reported at 4.4% and slightly higher than expected. Core inflation is up to 3.7% and also higher than expected. Inflation is running at an 18 year high in Canada now.
US CPI inflation has already been reported at 5.4%.
They join the EU where inflation was reported at 3.4%, as expected and above August levels. It was held up by Germany (4.1%) and Spain (4.0%), and restrained by France (2.7%) and Italy (2.9%).
India reported almost 4.4%.
But not all large economies are getting high levels of price rises at the consumer level - just those where economic activity is expanding at healthy levels.
Those where recovery is waning or a bit of a struggle are not getting strong price increases. That includes British inflation slipped to 2.9% and that was not only lower than in August, it was lower than expected. Demand conditions are tough there making price increases hard to stick. That also includes Japan (-0.4%) and China (+0.7%).
China also released its official data on house prices and that recorded a stall in growth, but not the sharp falls others have noted in regional pockets. But it is very noticeable from the city data released, more than half are showing declines in September from August. And 15% of the cities reported now have year-on-year declines in this official data.
Separately in China, Evergrande’s plan to sell it's property services division for US$2.6 bln to ease its liquidity crunch has collapsed at the last minute. The whole situation is very opaque in a country where transparency for investors is rare.
Meanwhile, China also reported foreign direct investment data and it was healthy, especially from countries linked to it via its Belt & Road initiative. The September increase is off a low base however.
Taiwanese exports keep going from strength to strength, up more than +24% from September a year ago and a new all-time record high. And they are now +40% higher than in September 2019.
Meanwhile, in Australia Delta cases in Victoria have risen to 1842 cases reported there yesterday, and no improvement. There are now 22,958 active cases in the state and there were 12 deaths yesterday. In NSW there were another 283 new community cases reported yesterday with 5,428 active locally acquired cases which is lower, but they had another 7 deaths yesterday. Queensland is still reporting zero new cases. The ACT has 17 new cases. Overall in Australia, more than 69% of eligible Aussies are fully vaccinated, plus 16% have now had one shot so far.
The UST 10yr yield opens today up +1 bp at 1.64%. The US 2-10 rate curve is very much steeper at +127 bps. Their 1-5 curve is little-changed at +106 bps, while their 3m-10 year curve is much steeper at +160 bps. The Australian Govt ten year benchmark rate is firmer by +3 bp at 1.78%. The China Govt ten year bond is unchanged at 3.03%. The New Zealand Govt ten year is up to a new higher level at 2.38% and another +4 bps rise and to nearly a three year high.
Wall Street has opened its Wednesday session with another +0.4% gain on the S&P500, by more good corporate earnings reports. In overnight European markets, most were up just +0.1% - except Paris which recovered a stronger +0.5%. Yesterday, Tokyo rose a minor +0.1%, Shanghai slipped a minor -0.2%. But Hong Kong rose sharply again, this time up another +1.2%. The ASX200 ended its Wednesday session with a +0.5% gain. And the NZX50 chipped in with its own +0.4% rise.
The price of gold has risen +US$18 to US$1787/oz, a +1% gain mainly because of the depreciation of the greenback.
And oil prices are little-changed at still just under US$83/bbl in the US, while the international Brent price is also still just under US$85/bbl.
The Kiwi dollar opens today further on the rise and now at just over 72 USc and up another +½c since this time yesterday. Against the Australian dollar we are now at 95.9 AUc. Against the euro we are up again at 61.8 euro cents. That means our TWI-5 starts today at just on 75.4, and now well over the top of the 72-74 range of the past eleven months. We have now appreciated +1.4% since the surprise CPI result on Monday.
The bitcoin price has risen a sharp +5.5% from this time yesterday and is now at US$66,429. That is now a new all-time high. And that puts it at NZ$92,225, also a record, and also the first time over NZ$90,000. Volatility over the past 24 hours has been high at just over +/-3.3%. The arrival of derivative products around cryptos is driving this latest surge.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».