Here's my summary of the key events overnight that affect New Zealand, with news equity markets are all risk-on.
The three major American equity indexes are trading at record-high levels today, powered by gains in financial, technology and industrial stocks. Part of this is due to an eye on the Federal Reserve and the recent uptick in inflation, part of it a scale-down in the rhetoric over North Korea.
In Europe, they are also reporting an uptick in inflation, albeit to only +1.5% pa.
The US Fed is now widely expected to be about to start on what is being called, the Great Unwinding, a plan to shrink its holdings of bonds built up during the GFC. Financial markets are taking this prospect in stride so far, but this is uncharted territory.
And staying in the US, a new report shows a surprising demographic change: Americans are moving far less than they used to. They were famous for being highly mobile, but that has changed. Millennials are the least likely to shift, even for work or job prospects. Oddly, it is retirees who are now the most mobile. This latest data turns the traditional view on its head.
In China, they are moving to open up their financial services industry to foreign institutions. They have previously said that too much protection for domestic institutions weakens the industry and can lead to financial instability. Now, new reforms may allow foreign companies to control their local finance-sector joint ventures, as well as raising the current 25% ceiling on foreign ownership in Chinese banks.
Portugal has gotten a rating upgrade with S&P pushing its rating back up to investment grade, BBB-. Its government debt now yields under 2.5%. Remember, it yielded 16.4% at the height of its GFC crisis. Economic growth the developing faster than analysts had expected.
In Australia, Moody's says that the proportion of Australian residential mortgages more than 30 days in arrears rose to 1.62% in May 2017, the highest rate in five years, and up from 1.50% in May 2016. They also say they expect this arrears rate to rise further from here through the rest of 2017.
In New York, the UST 10yr yield has resumed its pre-Fed meeting upward track and is now at 2.23%.
The price of crude oil has slipped just slightly to be under US$50 a barrel, while the Brent benchmark is just under US$55.50. The US EIA is forecasting rising output from American shale fields, continuing a long term trend.
The price of gold is down sharply, down -US$14 at US$1,307/oz.
And the Kiwi dollar has also slipped on a rising US dollar. It is now at 72.5 US a ½c fall. On the cross rates pretty much unchanged at 91.2 AU¢ however, and 60.8 euro cents. And the TWI-5 index is now at 74.7.
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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