Here's my summary of the key events overnight that affect New Zealand, with news the energy markets are changing again.
But first in China, the government there is getting frustrated at the lack of progress on pushing through its 'supply-side reforms'. This involves measures to cut excessive industrial capacity, destock, de-leverage, lower corporate costs "and improve weak links". Apparently at the top levels of power they are prepared to tolerate short-term pain to get the adjustment. But at regional levels there is anxiety about how all this will play out. Tensions are rising internally.
But one area showing a rebound is housing. For example in Shanghai, the bounce is quite dramatic.
India is expecting growth of nearly +8% this year, following last year's +7.6% expansion, a top Finance Ministry official told the Wall Street Journal. The one proviso; that the monsoon rains arrive normally, and that seems likely this year. Banks are expected to fund the private sector growth spurt, and the Government is to institute a GST to help fund its obligations.
Banks are not funding Australia's recent apartment boom in the way they once did, however. In fact, buyers who bought off-the-plan - especially foreign buyers - are finding Aussie banks reluctant to lend at all when time comes to settle, leading to a growing threat of fire-sales in this market. A trend for New Zealand buyers to watch out for, especially as we have our own apartment building boom occurring now in Auckland.
In New York the benchmark UST 10yr yield has bounced higher today to 1.74%. In fact, Wall Street is up very strongly, showing gains of well over +1% today in all the key indexes.
The oil price is higher again today with the US benchmark now just under $48/barrel and the Brent benchmark at US$49/barrel. These prices are now at a six month high, driven by worries about global supply outages. And the long-time oil bear Goldman Sachs has changed its tune to be 'positive' on the commodity, seeing US$50+/barrel becoming normal as demand grows and supply declines.
As a counterpoint, it is useful to note that at one point over the weekend, Germany produced almost all its electricity demand from renewables. It was a brief high-point to be sure, but it is useful to show the scale of the progress they have made.
The gold price is unchanged at US$1,273/oz.
And finally today, the NZ dollar will start at 67.9 US¢, at 93.2 AU¢, and at 60 euro cents. The TWI-5 index is now at 71.6.
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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