US productivity up; markets unsettled; NAFTA tensions rise; Canada house building jumps; Brits rush FX accounts; Aussie consumer confidence dips again; UST 10yr yield at 2.24%; oil unchanged, gold jumps; NZ$1 = 73.3 US¢, TWI-5 = 75.9

US productivity up; markets unsettled; NAFTA tensions rise; Canada house building jumps; Brits rush FX accounts; Aussie consumer confidence dips again; UST 10yr yield at 2.24%; oil unchanged, gold jumps; NZ$1 = 73.3 US¢, TWI-5 = 75.9

Here's my summary of the key events overnight that affect New Zealand, with news there is a retreat to safety underway around the world.

But first in the US, productivity picked up modestly in the second quarter but showed little sign of breaking out of the sluggish track it has been on for more than a decade. Low productivity growth holds back economic growth and living standards.

Currently, markets are unsettled and choosing risk-averse strategies after President Donald Trump's "fire and fury" warning to North Korea which has further escalated tensions on the peninsula.

Tensions are also rising with friends and neighbours. A White House proposal for Mexico and Canada to vastly raise the value of online purchases that can be imported duty-free from stores like Amazon is emerging as a flashpoint in an upcoming renegotiation of the NAFTA trade deal.

Meanwhile in Canada, new house construction is booming and on pace for its best year since the 2008-2009 recession. Rising interest rates there show no sign of slowing things down, nor are there fears of a housing correction.

In Britain, one bank is reporting a sharp rise in demand for foreign currency accounts by its customers. That demand was up +23% in June alone.

In Australia, despite rising business confidence, consumer confidence has turned further negative. The latest Westpac-MI survey of consumer sentiment had its index come in at 95.5 which is -5.5% lower than in August last year. Pessimists now outnumber optimists, and that is at its lowest since April 2016.

In New York, the UST 10yr yield is lower today at 2.24%. Conversely, risk premiums have reacted to the rise in Korean tensions, rising sharply today.

The price of oil has is basically unchanged and still just under US$49.50 a barrel, while the Brent benchmark is now just on US$52.50.

The price of gold has jumped US$21 on the firebrand boasting talk out of the White House, to US$1,275/oz. That is the biggest one-day jump in over three months.

But the Kiwi dollar will start today basically unchanged at 73.3 USc. On the cross rates we are at 93 AU¢, and at 62.2 euro cents. As a result the TWI-5 index is still at 75.9.

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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End of day UTC
Source: CoinDesk

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1 Comments

So ordinary Brits see Sterling weakening ( hence they are buying Forex) , and that will be a good thing , as it stimulates exports

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