Here's my summary of the key events overnight that affect New Zealand, with news markets are accepting more risk, just as some giant economic risks seem to be rising.
But first, sales of new single-family homes in the US surged to a more than eight-year high in April and prices hit a record high. This comes after earlier data showed that sales of existing homes moved higher as well. This is reinforcing evidence of a pick-up in American economic growth that could allow the Fed to raise interest rates soon.
Wall Street is markedly higher today. The Dow and the S&P500 indexes are more than +1% up in mid-day trading, the NASDAQ is up almost +2%. It's quite a rally.
In China, the IMF has sounded an alarm that China lacks a of sense of crisis and urgency in dealing with its current round of debt overhang. Apparently, on average Chinese companies now pay their bills in an average 72 days. The IMF estimates that puts a total 14% of all Chinese company debt at risk of becoming uncollectible. On that basis they say, it would equate to a reduction of 7% of the country’s economy. Yikes, that's some warning.
In Australia, there is an interesting grass-roots push-back underway in their major supermarkets. Consumers are boycotting supermarket-own-label milk in favour of regular brands. This is a way consumers can support higher prices for dairy farmers and stick it to the supermarkets for championing their low-ball A$1/litre milk products.
And staying in Australia, a new report says that if NSW imposed a 15% surcharge on foreigners buying in their real estate markets, it could end up hurting affordability for locals more. The claim is that the foreign buyer demand helps get may more new-build projects over the line and in construction, adding to market supply. Restrict the foreigner component and there will be much less supply coming on advocates say, and locals will be scrambling with fewer options.
In New York the benchmark UST 10yr yield is basically unchanged at 1.88%. There seems to be a switch out of bonds and into equities going on in financial markets.
The oil price is a little higher today with both the US benchmark and the Brent benchmark just on US$48.60/barrel.
The gold price is down sharply, down US$22 to US$1,229/oz.
And finally, the NZ dollar will start today just fractionally lower at 67.3 US¢, at 93.9 AU¢, and at 60.4 euro cents. The TWI-5 index is now at 71.3.
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 ».