Here's my summary of the key events overnight that affect New Zealand, with news a bank CEO trounced his inquisitors in Canberra yesterday.
But first, this morning's dairy auction has brought a disappointment - lower prices are back. They were -3% lower in US dollars, -1.5% lower in NZ currency terms. The price weakness was across the board with almost every product type reporting lower returns; WMP was down -3.8%. This stumble was noticed on currency markets, taking 0.3c off the NZD, which was already weakening from a stronger greenback. But stepping back and looking at the overall trend, today's results only represent a minor correction to a rising track.
Rising protectionism, record debt levels and a continuing economic malaise in wealthy countries will drag on global growth next year despite a turnaround in several key emerging markets, the IMF said today in its October edition of its World Economic Outlook. Anti-trade sentiment will limit world growth to just +3.1% this year and +3.7% next year, they forecast. While it is a first-world problem keeping open trade, it is not one they see in emerging markets and developing economies where they actually raised their trade forecasts by +0.4% to +4.1% in 2017.
In India, their central bank has cut its key policy interest rate to 6.25%, a -25 bps reduction to its lowest level for nearly six years, in some encouragement for their economy away from high financial cost burdens.
In Australia, most observers seem to agree that the CBA boss trounced the parliamentarians in their first attempt to grill a bank boss over culture and scandals. The four hour effort showed up the inquisitors are pretty ineffective, including those from opposition parties. Today, bosses from ANZ are in the firing line. Tomorrow it will conclude with the NAB and Westpac CEO. We are live-streaming these hearings.
In Vancouver, their housing market has tipped to one where sales are drying up fast. The compound combination of a series of local (vacancy tax), state (foreign buyer levy) and now Federal government buyer restrictions (closing a tax 'loophole') has spooked buyers completely and sales volumes are down by a third. Price declines are expected to follow. An inability to sell is crimping many locals, a new experience for them.
In New York, the UST 10yr yield has risen again today and is now at 1.68%.
The US benchmark oil price is a little higher too, now at US$49 a barrel, while the Brent benchmark is now just over US$51 a barrel.
The gold price has collapsed today, down more than US$40 in one session, and now at US$1,269/oz. That wipes out four straight months of slow and steady gains.
The New Zealand dollar is lower today on a rising US dollar and the lower dairy prices. It is now at 72 US¢, and on the cross rates it is at 94.6 AU¢, and 64.3 euro cents. The NZ TWI-5 index is now at 75.4.
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 ».