Here's my summary of the key news today in 90 seconds at 9 am, including news of the latest dairy auction.
But first, following on from yesterday's positive global factory data, overnight US service industries expanded much faster than expected in the latest ISM survey. This shows that the biggest part of the American economy held up well during the federal government shut down.
US home ownership rates rose slightly in the September quarter after a long decline. At 65.3% they are now back to where they were in the mid 1990s, and well off their 2004 peak of above 69%. (In 2006 New Zealand had a home ownership rate of 70% but we will need to wait for our latest census data to get an update of our current rate.)
Benchmark UST 10yr yields climbed to 2.66% overnight; gold fell to US$1,306/oz, and US oil fell to just over US$93/barrel; the Brent benchmark was down as well. The main US equities indexes started off much lower when they opened, but are now back to 'even' in late trade.
Late yesterday, the RBA held its official interest rate at a record low 2.5% and said its currency "is still uncomfortably high. A lower level ... is likely to be needed to achieve balanced growth in [their] economy." Markets didn't oblige however. The Aussie is unchanged after the Statement.
The continuing rise in Aussie bank profits is making analysts worried. It is claimed that the reductions in bad loan provisioning is now at unsustainable levels, and the gains from these cutbacks are ending. In fact, the situation may reverse. Something to watch.
In the overnight Fonterra auction, which saw the highest volumes offered and sold since September, prices were down another 1.8% in US dollars on the previous auction, and down 1% in NZ dollars. They have now fallen 10.6% from their recent peak in April in US dollars, and are down 7.2% from their recent NZ dollar peak in August. Compared with this time last year, they are up 41% in both currencies.
The NZ dollar starts today at 83.0 USc, 87.4 AUc, and the TWI was at 77.1.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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