Here's my summary of the key events overnight that affect New Zealand, with news the way mortgage brokers are paid is under scrutiny in Australia. (Updated with link to Choice submission.)
But first in the US, the pace of hiring rose in May, but the number of job openings actually fell, even though it is still at near-record levels. This data doesn't change the view that the US labour market is still in a healthy state.
Across the border, Canada's new house-building industry is recovering fast. New housing starts were up more than +9% in June from May. But that recovery still left it -3% lower than for June 2016.
Meanwhile, the Bank of Canada is widely expected on raise its benchmark policy rate for the first time in seven years, signaling the Canadian economy is on the path to recovery after years of tepid growth following the global slump in commodities that hit them hard. There is trepidation over the impact the move may have, even though the rise will likely be only +25 bps to 0.75%.
In China, their central bank is battling an increasingly sceptical business community over the exchange rate peg it applies to daily transactions. The yuan is closing consistently at the bottom of the permitted band set by officials. Many companies are parking their foreign currency in bank accounts rather than converting them. In May, those foreign currency deposits hit NZ$1 bln, the highest level in fifteen years. It is very unusual indeed for Chinese businesses to challenge their regulator in this way.
Singapore's sovereign wealth fund is growing more cautious, signalling that risks are rising in the US and around Brexit, and it has rebalanced its portfolio and reduced its risk. It is settling in for a few years of underperformance as it protects the value of its NZ$0.5 tln fund, the world's eighth largest such sovereign fund.
In Australia, there are calls to scrap all commissions and fees paid to mortgage brokers on the basis that they incentivise brokers work to get their clients deeper into debt rather than advise them of their best options. However, mortgage brokers are the dominant intermediary between customers and the banks in Australia and will be hard to wean them of the commission drug. The call is to replace commissions, both upfront and trail, with a fixed fee for service model.
In New York, the UST 10yr yield has slipped slightly for a second day, now to 2.36%.
The price of oil has risen slightly to just over US$45 a barrel, while the Brent benchmark is now just on US$47.50. There are reports that Saudi Arabia is pumping more oil than it committed to OPEC when the cartel mandated output cuts.
The price of gold is holding today, up by a marginal +US$3 to US$1,214/oz.
But the Kiwi dollar is almost -½ cent lower at 72.3 USc. On the cross rates we are almost -1 cent lower at 94.7 AU¢, and at 63.1 euro cents. The TWI-5 index is down to 76.3.
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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