US inflation expectations rise; China land prices up, car sales down. Japan growth modest; EU anxious; Lloyds Bank off to Berlin; iron ore prices surge; UST 10yr yield at 2.44%; oil and gold down; NZ$1 = 71.7 US¢, TWI-5 = 77.3

US inflation expectations rise; China land prices up, car sales down. Japan growth modest; EU anxious; Lloyds Bank off to Berlin; iron ore prices surge; UST 10yr yield at 2.44%; oil and gold down; NZ$1 = 71.7 US¢, TWI-5 = 77.3

Here's my summary of the key events overnight that affect New Zealand, with news of more strong rises in the iron ore price.

But first, American inflation expectations rose for a second straight month in January to its highest level since mid-2015. It is data that indicates American interest rates will keep climbing.

In China, new official data there shows residential land prices rose +7.9% over all of 2016.

And staying in China, car sales growth slowed sharply in January from December, hurt by holidays and reduced tax discounts. However over all of 2016, they reached a record high of 28 mln vehicles, up +13.7% in the year.

In Japan, data released late yesterday shows that their economy grew by +1% pa in the December quarter, just a tad lower than expected. It was helped by the yen's recent depreciation with both net trade and business investment contributing positively to growth. Consumer spending didn't, however. But that was as expected.

In Europe, an official review out overnight paints an anxious picture. Uncertainty about American policies, Brexit and elections in Germany and France are all expected to take their toll on the euro zone economy this year and keep growth to modest levels in the region.

And a major British bank looks like it will establish its European offices in Berlin as a result of expected post-Brexit consequences. And another British bank is throwing in the towel.

And in Australia, the futures pricing for iron ore we reported yesterday is being mirrored in the physical market. Actual prices surged +6.5% yesterday, extending its unexpected rally amid rising demand for steel in China and optimism about that demand. Iron ore for delivery to China's Qingdao port jumped $US5.61 to $US92.23 a tonne at its latest fix, a 30 month high according to Metal Bulletin.

In New York, the UST 10yr yield is higher by another +3 bps, now at 2.44%.

Oil prices are lower today, giving up yesterday's gain, now just under US$53 for the US benchmark, while the Brent benchmark is just under US$55.50 a barrel.

The gold price is also lower, down -US$10 and now at US$1,224/oz.

And the New Zealand dollar is lower as well. It is now at 71.7 USc. However, on the cross rates we are unchanged at 93.9 AU¢, and against the euro at 67.7 euro cents. The NZ TWI-5 index is at 77.3.

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 ».

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1 Comments

Iron Ore surging ... I suspect China is making stuff for no one again in an effort to keep the peace.

http://www.macrobusiness.com.au/2017/02/china-cuts-back-steel-coal-cuts/