Here's my summary of the key events overnight that affect New Zealand, with news there are early signs of stress in apartment markets on opposite side of the globe.
But first, Wall Street swung into positive territory earlier this morning as Janet Yellen said the Fed should proceed "cautiously" with its interest rate hikes, because inflation has not yet proven durable and there is a backdrop of global risks to the American economy. Other Fed speakers are counseling staying on the rate hike path.
Meanwhile, the data out today was pretty positive. American consumer confidence jumped in March as optimism about the short-term outlook for the their economy rose. The Conference Board’s index of consumer confidence rose to 96.2 in March from an upwardly revised 94.0 in February. And the S&P/Case Shiller composite index of house prices for 20 metropolitan areas rose +5.7% in January on a year-over-year basis, matching the increase the month before and only marginally less than expectations.
In England, their central bank has started raising its 'counter-cyclical capital buffer' from zero to +0.5% by March next year, and signaled it would then rise to 1% later. Their objective is to ensure banks can provide lending and other essential banking services in times of financial stress. The move sends a clear signal that they are facing such a threat.
In Australia, an independent group of well-connected 'wise men' has said the country’s eight straight budget deficits and four more on the horizon are “alarming” for a growing economy that’s approaching 25 years without recession. Their solution mirrors that offered by the opposition Labor Party: raising their capital gains taxes and limiting negative gearing. And this comes as worrying signs rise in the Melbourne apartment market with prices dropping by up to -30%. (And something similar may be starting in Miami, FL. too)
Locally, keep an eye out today for the February building consent data, especially that for Auckland.
In New York the benchmark UST 10yr yield has slipped in the opening session today and is now at 1.86%.
The oil price has also weakened further and is now at US$38/barrel in the US, while Brent is just on US$39/barrel.
The gold price starts a little lower too, now at US$1,217/oz.
But the NZ dollar will start today almost 1c higher at 68.5 US¢, at 89.9 AU¢, and at 60.8 euro cents. The TWI-5 index is now up to 71.9.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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