Here's my summary of the key events overnight that affect New Zealand, with news the Chinese have revealed the massive scale and growth in "off balance sheet Wealth Management Products".
But first, this morning, all eyes are on the release of the US Fed minutes from the February 2nd meeting, seeking out clues about the next benchmark rate rise. Update: These minutes show the Fed is expecting to raise rates "fairly soon" (see p16). The NZD has risen on the news against most currencies.
Meanwhile, American existing home sales rose strongly in January to a 10-year high as confident buyers seemed unworried about the combination of higher prices and higher mortgage rates.
South of the border, Mexico’s economy slowed down a bit in the fourth quarter, but broadly as expected. Mexican GDP growth was +2.1% higher in 2016 than the previous year. Interestingly, the growth rate in the December quarter was higher than this annual rate, although lower than Q3. In 2015, the Mexican economy grew +2.4%.
Also today, we have had a lesson in how long it can take for large trade agreements to become effective. Earlier in the day, the WTO's Trade Facilitation Agreement was finally ratified by the 110 countries needed, and it should usher in an era of reduced border restrictions to trade. The general claim is that it will be more important that any tariff reductions. New Zealand signed up in September 2015. But the original Agreement was concluded in December 2013 in Bali. Of course, all this is slightly ironic in the age of Trump. But the US is also a signatory - one of the first - and there is no recent suggestion that they will back out.
In China, more indications of their wild west financial system - from their central bank. The PBoC is reporting that Chinese banks have more than NZ$5.3 tln of wealth-management products held off their balance sheets at the end of 2016. That is +30% more than a year earlier, and far faster growth than normal lending. This type of financial system leveraging seems out of control in China. No-one is safe if it explodes.
In New York, the UST 10yr yield is currently rising at 2.45%.
Oil prices are lower today by almost -US$1, now just over US$53.50 for the US benchmark, while the Brent benchmark is just under US$56 a barrel.
The gold price is also lower at US$1,232/oz.
And the New Zealand dollar will also start today essentially unchanged at 71.6 USc. On the cross rates we are at 93.2 AU¢, and against the euro at 67.8 euro cents. The NZ TWI-5 index is still at 77.2 and is now the 13th days we have been in this tight range.
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 ».