Here's my summary of the key news over the weekend where it's about money printing and fighting deflation today.
The Bank of Japan surprised markets on Saturday by announcing a major expansion of its monetary stimulus policy. The move to flood the economy with more printed money boosted stock prices and gave a lift to its fight against deflation, but a rare split vote over the decision means further action will be difficult for the bank's leadership.
They have however decided to increase their annual stimulus to ¥80 tln, up from ¥50 tln. That is an increase of about NZ$330 bln, which represents about 150% of the entire annual NZ economy. The entire annual stimulus effort is now a stunning NZ$920 billion. Although it is all in their own currency, some will leak out to impact us. The size, timing and controversy surrounding this makes it look like a last-ditch-effort. Lets hope it works.
Meanwhile the eurozone is claiming a tiny victory in its battle to avoid Japanese-style deflation. October's annual inflation rose to 0.4%, up from 0.3% in September. The sharp fall in energy costs is keeping prices there very low.
In the US, data out on Friday showed that wages and salaries rose +0.8% in the third quarter - or +2.2% for the year - the largest increase in more than six years.
In China, factory activity has unexpectedly fallen to a five-month low in October as firms fought slowing orders and rising costs in their cooling economy. The data bolstered the view that the country's growth outlook is hazy at best.
However, those factories are still expanding, just at a slower pace.
Also over the weekend, Russia's central bank raised interest rates to 9.5% from 8% - a much bigger rise than had been expected - as it seeks to combat inflation that has suddenly risen to over 8% pa.
In New York, UST 10yr bond yields rose sharply at the close of last week and are now at 2.34%.
However the oil price fell yet again, and is now below US$80/barrel with the Brent price under US$86/barrel.
The gold price also fell very sharply again and is now well below the US$1,200 level at US$1,176/oz.
We start today with our currency lower following the big Japanese action. It is now at 77.8 USc, at 88.7 AUc, and the TWI is at 76.5.
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 »
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They have however decided to increase their annual stimulus to ¥80 tln, up from ¥50 tln. That is an increase of about NZ$330 bln, which represents about 150% of the entire annual NZ economy. The entire annual stimulus effort is now a stunning NZ$920 billion. Although it is all in their own currency, some will leak out to impact us.
Hmmm - maybe it's time to dust off the RBNZ uridashi bond "how to" .pdf?
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