Here's my summary of the key events overnight that affect New Zealand, with news of some major Chinese data today.
But first, Wall Street is rising. The Dow index is at 18,000, the first time at that level since July 2015.
The New York Fed boss commented overnight that American economic conditions are "mostly favorable", although he confirmed their policy would remain cautious because of threats to the global economy.
China has agreed to scrap export subsidies on a range of products in a step to reduce frictions in bilateral trade. Facing a WTO challenge, China agreed to end a program which provides export subsidies to Chinese companies in seven economic sectors, including textiles, light industry, specialty chemicals, medical products, hardware, .advanced materials and metals, as well as for agriculture. This u-turn comes as the country makes increasing efforts to reduce surplus manufacturing capacity.
Staying in China, prices for new homes in the country’s biggest cities are rising sharply, led by the southern boomtown of Shenzhen, where prices jumped a staggering +60% in March, compared with the same month a year ago. The real estate resurgence comes as growth across the rest of the economy is slowing, providing a welcome and significant boost, and real estate is now the fastest growing sector in their economy.
That data is for March. In April the giant boom in China’s US$3 tln corporate bond market is starting to unravel. Bloomberg is reporting a fresh wave of defaults at state-owned enterprises which is spooking investors in China’s yuan-denominated company notes who have driven up yields for nine of the past 10 days and triggered the biggest selloff in onshore junk debt since 2014. Local issuers have canceled more than US$9 bln of bond sales in April alone, while Standard & Poor’s is cutting its assessment of Chinese firms at a pace unseen since 2003.
In New York the benchmark UST 10yr yield is a little higher today at 1.78%.
The oil price is now just under US$40/barrel in the US, while Brent is now just under US$43/barrel. It fell sharply following the failure of the OPEC talks but has grained as markets focus on a Kuwaiti oil workers strike.
The gold price is unchanged at US$1,233/oz.
And finally today, the NZ dollar opens at 69.4 US¢ and its highest level against the greenback since June 2015, at 89.7 AU¢, and at 61.4 euro cents. The TWI-5 index is now at 72.2.
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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