Here's my summary of the key issues that affect New Zealand overnight with news of stalling activity worldwide, and New Zealand looks like an island of prosperity in comparison.
In the US, retailers are reporting sluggish Black Friday spending, with sales falling -11% from the same period last year, according to an industry group.
Meanwhile, American factory activity moderated in November, but built rises in new orders and export orders. The moderation is from a high level and all this suggests their economy retains its new mojo despite slowing global growth.
Growth in Chinese factories stalled in November as output shrank for the first time in six months, reinforcing expectations that authorities will roll out more aggressive stimulus.
In Japan, Moody's has downgraded their credit rating from Aa3 to A1 as concerns mount that they will get of top of their issues. The credit rating move suggests confidence in Prime Minister Abe's radical program is ebbing.
In Europe, Germany, Italy and France all reported contracting manufacturing sectors in November. This doesn't look good at all and comes on top of an inflation rate that has almost disappeared.
We reported on the Swiss gold referendum question yesterday but overlooked another issue they were deciding on - immigration levels. Swiss voters however overwhelmingly rejected a proposal by a Green group to drastically curb the influx of foreigners seeking to work and live in their country. It was a second major effort this year aimed at restricting immigration.
UST 10yr bond yields were unchanged in New York overnight, holding at just 2.17%. The NZ swap rate starts today lower and flatter. In fact the 2-10 curve is at just 42 bps and the more important 1-5 curve - from a mortgage point of view anyway - is now at just 33 bps which is a six year low.
Meanwhile, the oil price has seen a small bounce overnight. The US price is now at US$69/barrel and the Brent price is just on US$72/barrel after last weeks sudden fall. No real recovery yet, and we should see the benefits flow into our spending power. The Russian ruble plunged to a record low for a third day, prompting speculation Russia’s central bank intervened to stem losses triggered by the tumbling oil prices.
The gold price however has has made a spectacular comeback overnight adding +5% or more than US$65 to rise back above the US$1,200/oz level again after falling to almost US$1,140/oz. It is currently at US$1,207/oz.
The kiwi dollar strengthened overnight against all-comers. We start today at 79 USc, 92.8 AUc, and the TWI is at 78.9.
If you want to catch up with all the changes from yesterday 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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