US building consents jump; US consumer delinquencies rise as debt rises; China FDI falls; AU labour market unimpressive; UST 10yr yield at 2.46%; oil unchanged, gold up; NZ$1 = 72.3 US¢, TWI-5 = 77.5

US building consents jump; US consumer delinquencies rise as debt rises; China FDI falls; AU labour market unimpressive; UST 10yr yield at 2.46%; oil unchanged, gold up; NZ$1 = 72.3 US¢, TWI-5 = 77.5

Here's my summary of the key events overnight that affect New Zealand, with news the American consumer debt rise is looking uncomfortably pre-GFC like.

But first, US jobless claims are holding at low levels.

And American home building fell in January as the construction of multi-family housing projects dropped, but upward revisions to the prior month's data and a jump in permits to a one-year high suggested their housing recovery remained on track.

These may be good signs, but there are others. More than a million US consumers have now fallen at least two months behind on car loan repayments and the delinquency rate has now reached 1.44%, its highest level since 2009, in this US$1.1 tln market. Delinquencies on credit cards are also on the rise and are now up to 1.79%, their highest since 2011. All this is despite low interest rates and low unemployment levels.

And the New York Fed is reporting that the total amount of debt held by American households climbed in 2016 by the most in a decade, driven by increases in credit card debt, car and student loans, and a fourth-quarter surge in new home mortgages, the highest since before the GFC. The rise in mortgage origination is good news for banks, even the publicly owned Freddie Mac, which is to pay the US Treasury a dividend of US$4.5 bln.

In China, the level of foreign direct investment into the country in January fell -9.2% compared with the same month a year ago. That is a sharp reversal from the +5.7% rise in December.

In Australia, their jobless rate fell in January, but that masked some uncomfortable trends. The employment rate is stuck, the participation rate is down, and most of their new jobs are from a sharp rise in part-time work.

In New York, the UST 10yr yield is lower today as markets develop something of a risk-off sentiment and pull back from their recent record rises and is now back at 2.46%.

Oil prices are essentially unchanged today and still just over US$53 for the US benchmark, while the Brent benchmark is a tad lower at just under US$55.50 a barrel.

The gold price is US$16 higher today and now at US$1,240/oz.

And the New Zealand dollar is essentially unchanged at 72.3 USc. On the cross rates we are at 93.9 AU¢, and against the euro at 67.8 euro cents. The NZ TWI-5 index is at 77.5.

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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USD 
NZD
End of day UTC
Source: CoinDesk

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Those delinquincy rates are still pretty low and in the US there's no shortage of people making bad financial decisions. Credit is still very easy to obtain.

That is true. But in 2008 these markets wobbled badly when they approached 2%. This chart will give a better perpective.

That "average debt per borrower" has really climbed since 2009, from around $14,500 to around $18,500 around 30 % growth while inflation has been very low , so its not prices driving the growth , its them borrowing more .

The NY Fed household debt figures are quite sobering when compared to New Zealand's own. Understanding its not all apples with apples, but on a population basis, comparatively we would have 18.86 Trillion in household debt , the percentage of mortgage debt would be double at 16.6 trillion, and account for 88 percent of outstanding household debt. Interestingly its the student loan debt where delinquency rates are increasing the quickest , not dissimilar to New Zealand, and its obvious implications. Also noted , like most, the NY Fed puts student loans in household debt , the RBNZ fails to do this, yet this debt would be considered if an individual sought further credit. Our household debt /income metrics are understated and should reflect this debt, pushing that metric to 179 percent.