Here's my summary of the key events overnight that affect New Zealand, with news the Aussies are bringing in criminal sanctions for financial market manipulation.
But first, according to one influential survey, American factories ramped up activity in September, shaking off a one-month contraction. But in another similar survey, the gains were recorded in August with September showing the slower expansion.
Perhaps American car sales trends will influence their factory data in October. Major car-makers reported lower September sales today despite high discounting, as pickup truck volumes fell for both GM and Ford. The pace of sales however remains historically strong, but dealership traffic is leveling off after more than six years of steady growth. Against the trend, Tesla delivered a record 25,000 all-electric vehicles in the period. It is still a minnow, however.
Globally, factory expansion remained in low gear, with the Eurozone still reporting modest gains, Japan improving marginally, and China stagnating. The ASEAN countries are making gains, driven by the Philippines which is at a record high, Vietnam and Indonesia. Thailand, Singapore and Malaysia are all in fact contracting slightly.
In Europe, an ECB official has warned that negative interest rates may be inherently damaging to the financial system without actually delivering benefits to borrowers.
In Australia today, we will get the first of the four sessions grilling their bank CEOs, starting with Kiwi Ian Narev of CBA. We will have live-stream coverage. None of them know what the parliamentarians will throw at them and each will need to respond for an amazing four hours. It has all the hallmarks of a medieval inquisition.
Ratcheting up the pressure, the Aussie government has announced tougher standards for bankers, signaling it will apply criminal sanctions in future for things like interest rate manipulation.
In New York, the UST 10yr yield has risen again today and is now at 1.62%.
The US benchmark oil price is a little higher too, now at US$48.50 a barrel, while the Brent benchmark is now just over US$50.50 a barrel.
The gold price was down yet again however, now at US$1,309/oz.
The New Zealand dollar is a little lower today than yesterday but still in a narrow range, now at 72.7 US¢, and on the cross rates it is at 94.8 AU¢, and 64.8 euro cents. We should also note that this morning, the Kiwi dollar is at its highest level ever since the 1985 float, against the UK pound at 56.6 British pence. It's fall was triggered by the announcement of an actual Brexit date. It was a unilateral announcement without any EU access deals and will put Britain in a tough place in any future negotiations. The NZ TWI-5 index is now at 75.8.
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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