US housing and consumer confidence rebound; China pumps in another $40 bln; Ukraine gas deal close; Oil down but petrol up; NZ$1 = US$0.793, TWI = 76.9

Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news the oil companies are not passing on the fall in crude prices in local petrol prices.

But first, new residential construction in the US in September came in more positive than most analysts were expecting and seemed to buck the trend of nervousness in other markets. Building permits, housing starts and housing completions all rose strongly, and August data was revised up in some categories.

In fact, American consumer confidence is up in the latest survey. The respected University of Michigan index of consumer sentiment unexpectedly rose in early October to its highest level since July 2007.

In China, the central bank said over the weekend that it plans to inject more than NZ$40 bln into about 20 of their large banks in a concerted program shore up their economic growth and counteract the global slowdown.

In fact, China is now gearing up to import 15% more iron ore in 2015, but the miners have so much of the stuff they are budgeting for lower prices.

And it was announced earlier this morning that Russia and Ukraine have agreed a price for winter gas supplies, moving closer to a deal that would ease concerns that the countries’ dispute could disrupt supplies to Europe.

And staying in Europe, negative interest rates are getting embedded. Several global banks have begun charging large clients to deposit their money in euros, a rare move that could have 'interesting' implications for investors who do business there.

UST 10yr yields ended last week higher but only back up to 2.20%. In New Zealand this morning we start with wholesale swap rates up, but only back to where they were last Wednesday. Banks are staring to reflect these overall lower rates in new reductions in mortgage rates. So far, term deposit rates have held their levels.

The oil price is now under US$83/barrel with the Brent price now just on US$86/barrel. The longer these international prices stay this low, the more likely someone will ask why there hasn't been a pump price reflection locally. In fact, the cost of crude has fallen -14% since the beginning of 2014 (-17% in US$), but pump prices have actually risen +2.3%. Taxes have gone up +4%, but local company margins have risen +20%. And that is the MED monitoring data. It's costing you about 5c/litre.

The gold price was unchanged at US$1,238/oz.

We start today with our currency level just marginally lower. The NZD is at 79.3 USc, at 90.5 AUc, and the TWI is at 76.9.

If you want to catch up with all the changes on Friday we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »