Here's my summary of the key events overnight that affect New Zealand, with news of a surprise move in India today.
But first, all markets will be eyeing the US presidential election results which will start coming through at about noon, NZ time. In advance of these, US markets are firm, with stocks higher, bonds lower, and gold lower as well. We are updating a live blog on this event, which will try to keep you updated on the implications for New Zealand. You can add your nickel's worth too in the Comment section.
But there are other things going on that you should know about.
China’s exports fell -7.3% in US dollar terms in October from a year earlier, as demand for goods from the world’s second-largest economy remained sluggish. But in yuan terms, exports were up +3.2% while imports were down -3.2%. Their recent devaluation moderated the changes. In either currency, the result was not as weak as economists were expecting.
China reports its consumer price inflation today and most analysts see it rising to +2.1%.
In India, the government made a surprise announcement today, saying their two largest denomination banknotes would be withdrawn as part of a way to fight corruption and counterfeiting. These two notes have ceased to be legal tender about an hour ago (midnight India time). Markets approved the move.
OPEC said today that crude oil prices will rise much less than expected in the next four years, because supply and demand haven’t reacted to the oil slump as strongly as expected. They are just another party that misunderstands the way world trade and local industry are changing in a digitised world.
Bloomberg is reporting that China’s US$3.2 tln corporate bond market is already starting to reel from rising interbank borrowing costs - and the traditional year-end funding crunch hasn’t even started yet. It is an ominous sign, and one we should watch over the next six weeks or so.
In New York, the UST 10yr yield will start today much higher again, now at 1.87%. Expect a similar rise in local markets, especially at the long end. Our 1-5 rate curve is now +44 bps, its highest for 2016, while the more important 2-10 curve is now at +72 bps, a six month high.
The US benchmark oil price is marginally firmer, and is now just over US$45 a barrel, while the Brent benchmark is above US$46 a barrel.
The gold price is down again and now just under US$1,274/oz.
The New Zealand dollar will start today somewhat higher than this time yesterday, at 73.5 US¢. On the cross rates it is now up at 95.1 AU¢, and against the euro at 66.7 euro cents which is actually a 17 month high. We are also at a record post-float high against the British pound at 59.5 English pence. The NZ TWI-5 index is at 77.5.
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 ».