Here's my summary of the key events overnight that affect New Zealand, with news there is finally an arrest in the VW diesel cheating scandal.
But first, in the US a NY Fed December survey of consumers showed that short-term inflation expectations rose significantly from November. Labor market expectations generally improved, with an increase in earnings growth and job finding expectations. Household finance expectations also improved, showing increases in household income and spending growth and slight improvements in perceptions of credit availability. Expectations about increases in interest rates on savings accounts and in American stock prices rose significantly.
And in San Francisco, the senior Fed official there said more fiscal stimulus is not needed from the Trump Administration. He noted that both the US labour and inflation data shows that the US economy is on track and fully recovered, and what the Congress should do now is tackle the Federal budget deficit.
Here's something you don't hear about often. In South America, Paraguay is booming, by modeling itself on China's early development strategy. It is picking itself up out of poverty and underdevelopment by becoming a focus for regional manufacturers. Its larger neighbours are growing increasingly uncomfortable however, especially as they are mired in a bureaucratic recession themselves.
In Australia, new data out there shows that the wealthiest suburbs are among the most vulnerable in terms of mortgage stress. For example, the data shows that households in Melbourne's Toorak, where the median house price is AU$3.5 mln, are five times more likely to default on mortgage payments than the national average. Residents in the Sydney beachside suburb of Bondi are facing the same financial stress. It's a bit like fancy cars; if you see one, you are probably seeing a highly leveraged asset of a finance company.
Back in the US, the FBI has arrested VW executive Oliver Schmidt and charged him in connection with the company’s emissions-cheating scandal.
In New York, the UST 10yr yield is lower today and now at 2.38%.
Oil prices are about US$1.50 lower today too, now just under US$52.50 for the US benchmark, while the Brent benchmark is now just on US$55..50 a barrel.
The gold price will start a little firmer today at US$1,178/oz.
The New Zealand dollar is firmer also and now at 70.2 US¢. On the cross rates it is holding at 95.4 AU¢, and against the euro up at 66.4 euro cents. And we are at a two month high against the British pound which comes as the UK says it will seek a 'hard Brexit'. The NZ TWI-5 index is up to 76.6.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».