Here's my summary of the key events overnight that affect New Zealand, with news China is rolling out more big infrastrucure projects.
But first, American inflation had its largest rise in six months in October. Rising petrol prices and rents were notable from September. Their CPI was up +1.6% year-on-year, but +2.1% when you exclude food and energy costs. Janet Yellen said earlier today that a rate hike could come 'relatively soon'. The evidence is overwhelming now for a rate hike on December 15.
The number of American jobless claims fell sharply last week to the lowest level since 1973, while the number of housing starts rose sharply, up +4.6% on the same month a year ago. 'Real' after-inflation wages rose +1.2% in the year to October and average wage earnings in the US are now at NZ$1,264/week. The new American administration is being gifted a very healthy economy.
This data has arrested yesterday's question markets about the prospects of higher interest rates fairly soon.
In China, they have just approved the building of five new major rail projects, to the tune of NZ$40 bln of investment stimulus.
Chinese data out overnight also shows the flood of funds leaving the country is accelerating. Outward Direct Investment from China was more than NZ$200 bln, a +50% risen the ten months to October. Most is buying up American assets (up an eye-watering +175%). It is also noticeable that Chinese firms are not supporting their government's "belt and road" projects to any where near the same extent - these are up a much more modest +30%.
Singapore is doing it tough on trade these days. Their non-oil domestic exports posted the largest decline in seven months in October. They were down -12% and that follows a -5% drop in September. The falls have been driven by a slump in pharmaceutical exports.
In Australia, an accounting firm with a client base of wealthy Sydney-siders, has lost a high profile tax evasion case that will see many of them having to cough up millions to settle offshore tax arrangements. Samoa is a link in some of them.
In New York, the UST 10yr yield is now up to 2.27% on the very good US data out today.
The US benchmark oil price is marginally higher today, and is now just under US$46 a barrel, while the Brent benchmark is now just under US$47 a barrel.
The gold price is unchanged at US$1,225/oz.
The New Zealand dollar will start today just a little lower, at 70.6 US¢. On the cross rates it is now at 94.6 AU¢, and against the euro at 66.2 euro cents. The NZ TWI-5 index is still at 76.
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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