Here's my summary of the key events overnight that affect New Zealand, with news Australian regulators are re-thinking the risks of their 4 pillar banking policy.
But first, today's dairy auction has brought a small gain, the second in a row. But in fact, prices have been essentially flat since May. The gain in US dollars was +0.9% with the key WMP price up +0.6%. In New Zealand dollars, in fact overall prices were -0.2% lower and that is because the Kiwi dollar has found some strength overnight. Volumes sold were their highest in almost a year although these auctions only represent a small part of the product the NZ dairy industry actually has available, probably less than one third.
Fonterra's annual result will announced next Monday (September 25) and that this latest auction would suggest it won't be changing the current $6.75 milk price forecast.
In the US, the international distaste for their politics is having an effect on their economy. Tourism is down sharply in 2017, down -4.2% compared with the same period a year ago and a loss of US$2.7 bln in tourism spending. In the similar period of the previous Administration, tourism was up +6.4%.
Separate data shows that American building permits were up a very healthy +8.3% year-on-year in August while housing starts inched up +1.4% on the same basis. A pipeline of work is building there.
And the US current account deficit, which is the broadest measure of US trade, rose to -$123.1 bln (NZ$) in the second quarter - its highest level since 2008. That is -2.6% of GDP. We will get our New Zealand equivalent today, expected to be a similar -2.7% of GDP. Our track is declining.
In Canada, they ran a smaller budget deficit that was expected, but it was still much larger than the year before and is growing after a string of nine such deficits. Prior to the GFC it regularly ran surpluses. A recent change to a left-leaning government has boosted spending far more than revenues. Still, the current deficit is 'only' a bit less than 1% of GDP. Their federal debt is more than NZ$700 bln however (ten times more than New Zealand's).
In Norway, their sovereign wealth fund built on the back of its oil resources has reached the value of US$1 tln for the first time since its establishment in the 1990s, meaning that each of its 5.3 mln citizen owns about NZ$250,000.
In Australia, their competition watchdog wants the "four pillars" policy that prevents big bank mergers or sale to be put under the microscope, saying there is an argument it insulates the banks from fierce competition.
In New York, the UST 10yr yield is still firming ahead of the Fed announcement tomorrow and is now at 2.24%.
The price of crude oil has slipped again to be over US$49.50 a barrel, while the Brent benchmark is just under US$55.50.
The price of gold has also slipped, down -US$2 at US$1,305/oz.
But the Kiwi dollar is up today. It is now at 73.2 US a rise of about ¾c. On the cross rates we are also a little firmer at 91.4 AU¢, and 61 euro cents. And the TWI-5 index is now at 75.2 and that is a one month high.
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 ».