Here's my summary of the key events overnight that affect New Zealand, with news there is optimism in the air again and it is overwhelming boomer angst.
On Wall Street today, the S&P 500 has has pushed on higher breaking yesterday's record as investors are more optimistic about the American economy with lingering concerns about global growth in the background. Other stock markets are pushing higher as well.
That optimism is flowing though to airlines and the major planemakers who have raised their long-term forecasts for new aircraft demand, betting that rising wealth in Asia would continue to boost air travel and offset any short-term hits to the global economy. The immediate data shows a +4.6% growth in passenger traffic in the year to May. Global airfreight growth was pretty modest in May however.
In China, industry data out overnight showed that they produced and sold a tad over 2 mln vehicles in June, which is up almost +15% on the same month a year ago, although that was marginally less than in May. This is the sort of data that goes a long way to reassuring investors that China is not coming unstuck and the transition to a more consumer-oriented economy is happening.
Perhaps part of the reason things "aren't as bad" is that power, the media, and the news narrative is run older people. This age group is nowhere near as optimistic as others; it is the young who are more positive about their future and their spending habits reflect that - on cars, on travel - and these habits continue to drive the world economy. This seems true in the US and Europe, as it is in China.
Even in Japan, the optimism of youth has handed prime minister Abe a decisive election win. Japanese in their teens and 20s backed has ruling coalition in Sunday’s parliamentary voting, a sign that Japan's hawkish security policy and the improved job market were well-received.
Meanwhile, the older heads at the IMF still see trouble and their latest gaze has turned to the EU and eurozone. They see the euro area in recovery but also see the medium-term outlook weak. They want to see further integration including a common deposit insurance level, and improvements to bank balance sheets.
Back in New York, UST 10yr yields rose sharply today and are now at 1.42%.
On the other hand, the US benchmark oil price has slipped, now just under US$45/barrel and the Brent benchmark is just over US$46/barrel.
The gold price is also marginally lower, now at US$1,355/oz.
The NZ dollar starts today almost ½c lower against the greenback at 72.2 US¢, is at 95.8 AU¢, and at 66.3 euro cents. The TWI-5 index is at 75.
If you want to catch up with all the local changes on Friday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.