Here's my summary of the key news overnight in 90 seconds at 9 am, including news full of key data today.
In the US, sales of new homes in October were reported to be a remarkable 25% higher than the September level. The median price was US$245,800 (NZ$300,000).
This Saturday we will get the November non-farm payroll report, but today we got the pre-cursor ADP survey and at +215,000 this came in much higher than analysts were expecting.
The US economy imported more and exported more in October, and had a trade deficit of US$40 billion, which was about the expected level and slightly lower than previously.
But unexpected was the softer confidence on services, which fell quite sharply. New orders and business activity were strong, but the employment component was much weaker.
The Federal Reserve's Beige Book review of current economic conditions reported "modest to moderate growth" across the whole country. They also reported that firms are having difficulty finding skilled staff.
In Bali, the WTO has hit another stumbling block in the push to get an agreement; India wants special treatment.
European regulators announced big fines for another six banks in the LIBOR scandal investigation, this time including two American banks. That now tallies up to US$6 billion so far in this crackdown.
In more legal news, the US Attorney General said they are close to some big new civil fraud cases against more big US banks early in the new year, following up on the huge US$13 bln JPMorgan settlement.
Gold got down as low as US$1,211, but has shot up to over US$1,240 as the Dow has fallen. Markets are betting the good employment data will encourage the Fed into a tapering announcement soon. The UST 10 year benchmark bond yields have jumped to 2.83% this morning.
Overnight it was reported by SWIFT that the Chinese yuan has moved passed the euro to be the second most used currency in international trade, at 8.6% of all deals in October, vs the euro's 6.6%. This is a remarkable result - in January 2012, the yuan only did 1.9%. The US dollar still accounts for more than 80% of all trade.
The NZ dollar starts today at 81.7 USc, 90.8 AUc which is a new five year high and follows the Aussie Q3 growth data which was reported as 'sluggish'. The TWI is at 77.0.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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1 Comments
The RBNZ does this review every year in December. The next revision is coming up very soon. The trade weighting is not by country of import or export; rather it is a weighting by the currencies used in those trades.
The RBNZ has two TWIs now. One of the five major currencies, the other of the top 15. Both track quite similarly.
Given the speed of growth in the use of the yuan, I would expect the GBP to drop out of the TWI5 this year or next to be replaced by the yuan. Can't see much change in the composition of the TWI15 though - just tweaking of the weights.
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