Here's my summary of the key news the weekend in 90 seconds at 9 am, including news Wall Street is getting nervous about our banks.
But first, we are expecting some big events this week. Months of anticipation may come to an end this week if the US Federal Reserve finally announces how it will start to rein in its massive stimulus of the American economy, which has flooded financial markets with some US$2.75 trillion over the past five years, supercharging returns on everything from stocks to junk bonds. We will know on Thursday.
On Wednesday, we get the New Zealand current account deficit result for Q2, and it is widely expected to show a worsening due almost all to the effects of the drought. Then on Thursday, after the Fed news, we will get Q2 GDP figures, also anticipated to be drought affected.
In a few minutes, the delayed REINZ data for August house sales will be released, giving an important update to our understanding of these markets nationwide, and the pre-spring condition of the distorted Auckland market.
Not only are these markets attracting RBNZ and regulator attention, international hedge funds are now betting against Aussie banks on the basis of over-valuation, the AFR is reporting.
They anticipate a fall - from which they would profit - because they see local markets have raised bank values way faster than other industries. In fact, Aussie banks represented 2% of global bank capitalisation 10 years ago, now they represent 14%. They also worry about their exposure to residential real estate. Under this analysis, CBA is in the 'worst', most over-valued position.
Staying in Australia, the NAB, owner of our BNZ, has signaled its wants to grow its market share of residential mortgages. Both the NAB and BNZ have lower mortgage shares than other big banks and they see a growth opportunity for themselves in more mortgage lending.
Gold starts the week at just $1,312/oz. Oil is up, and equities are rising, the Dow is at 15,380. The US Treasury 10 year is still not over 3%.
The NZ dollar starts the week at 81.2 USc, 88.1 AUc, and the TWI is at 76.4.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
No chart with that title exists.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.