Here's my summary of the key events overnight that affect New Zealand, with news the Volker Rule is under attack in the US.
Firstly however, June aircargo data was released today and that shows world trade in a very healthy state. The June data was +11% higher that the same month a year ago, with aircargo shipments in North America up +12.7% and in Europe up a remarkable +14.3%. Overall international airfreight volumes are up +12.0%. By any measure, these are very substantial gains.
In the US however, the pre-cursor ADP employment report has disappointed somewhat. Markets were expecting a +190,000 employment gain in July but it actually came in at +178,000. This is an advance indication of what to expect in the US non-farm payrolls report due out on Saturday.
Also somewhat disappointing was a fall in the number of new mortgages approved in the US. They decreased -2.8% in the latest week reported. American are now paying about 4.15% for a 30 year mortgage, about 3.45% for a 15 year mortgage.
Perhaps one reason is that Americans, once renowned for their willingness to move in search of opportunity, are decreasing that willingness to be mobile. They are now their least economically mobile in about 70 years.
And lets not forget that the pressure from the reaching of the US debt limit is growing. There may only be eight weeks left until a shutdown, and more experts are warning of the dire consequences if no solution is found. And if they leave it too late, that could prompt a borrowing surge by the US, causing new problems in debt markets.
Their may be more trouble as well. The Trump Administration is moving to wind back the Volker Rule - which would open back up the option by banks to restart 'proprietary trading', again de-emphasising the core role of banking.
In India, their central bank cut its main lending rate by -25 bps to 6% which is a more than six-year low, as both inflation and economic growth slowed. Inflation has fallen dramatically to under their target rate of +4%, and growth has slipped to a +6.1% annual basis.
And keep an eye on the border dispute between India and China. Both sides are digging their heels in with no sign of compromise.
Remember Van Diemens Land Company, the large Tasmanian dairy operation that was owned by the New Plymouth District Council? They sold it in April last year for NZ$300 mln to a billionaire Chinese buyer, a deal that was approved by Canberra on the basis that he invest another $100 mln into the operation. But he is in trouble - he can't get that sort of money out of China any more and is looking to sell already.
And there are rumours in Australia, that ANZ Melbourne is moving to sell its New Zealand life insurance business. It must be frustrating for ANZ New Zealand to get bits of its operation flogged off by their Aussie parent. First UDC, now this.
In New York, the UST 10yr yield is up today at 2.27%.
The price of oil is up slightly today at just over US$49.50 a barrel, while the Brent benchmark is now just under US$52.50. But OPEC and other big oil producers are now facing a new problem: how to keep the oil market calm if they decide to lift their output curbs and ramp production back up.
The price of gold is down by -US$4 to US$1,268/oz.
And the Kiwi dollar will start just slightly softer again today at 74.4 USc. On the cross rates we marginally lower as well at 93.3 AU¢, and at 63.7 euro cents. As a result the TWI-5 index will start today at 76.7.
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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