Here's my summary of the key events overnight that affect New Zealand, with news there are signs 2%-plus inflation is emerging in the world's large economies.
But first, global factories are in good shape with the global PMI hitting a 69 month high in February, led by strong new order growth. In the US there was a slight easing from a high rate in one survey but a faster expansion in another. Europe had another strong gain to a 70 month high. China is managing to hold on to a small expansion, while Japan achieved another uptick and is now at a 35 month high.
In the US, data out for mortgage applications rose strongly with the average mortgage rate now at 4.30%.
American car sales, an early-month indicator of consumer spending, fell slightly in February but remained strong as pickup trucks and SUVs led the way. Both GM and Nissan had sales rises while Ford reported lower sales. All beat analysts expectations. But profitability might be an issue. Discounts exceeded 10% of the average selling price, the highest level since 2009.
Across the Atlantic, Germany’s annual inflation rate has accelerated at its fastest pace in more than four years, rising to +2.2% in February, and now above the ECB’s 2% target rate for the eurozone.
In China, apparently officials there have ordered steel and aluminium production cuts in an effort to control run-away pollution. This is an area China's public policy has been woefully ineffective.
In New York, the UST 10yr yield is up strongly today at 2.46%. And risk premiums are falling in the credit default swap markets.
Oil prices are down marginally today and now just over US$53 for the US benchmark, while the Brent benchmark is just over US$56 a barrel. American crude inventories are now at a record high.
The gold price is also a lower, down US$10 at US$1,246/oz.
And the New Zealand dollar starts today almost 1c lower on a stronger greenback at 71.4 USc. On the cross rates we are at 93 AU¢ after yesterdays surprisingly strong Aussie GDP growth report, and against the euro at 67.6 euro cents. The NZ TWI-5 index is down to 77, a seven week low even though it is still in its narrow 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 ».