Here's my summary of the key events over the weekend that affect New Zealand with news of a messy US jobs report.
US non-farm payrolls fell by -33,000 in September from August, the first month-on-month decline in seven years. Hurricanes have been touted as the reason, but of course there have been hurricanes many times in those seven years. Prior month data has also been revised lower. But hourly pay rates rose +2.9% year-on-year, the fastest rise in at least five years. While the employment data is somewhat messy, the wage data is very important. And Fed observers expected then to ignore the headline jobs levels and see the pay rate rise as a reason to raise rates again at least once this year.
In Germany, an odd situation is brewing between a major bank and its largest shareholder. The CEO of Deutsche Bank has been going out of his way to snub HNA Group who have built up a 10% shareholding in the bank. The odour seems to be too much for him. But his is a bank in need of bolstered capital, so the bargain made is very uncomfortable for the institution.
In Australia, according to a joint study by analyst Cross Border Management (CBM) and BIS Oxford Economics, Chinese buyers accounted for less than 2% of all Australian real estate transactions in 2016, and contributed less than 1% ($122 out of $12,800) to the average quarterly housing price increase.
And in China, today marks the end of their Golden Week holiday period. It also marks the start of the run-up to the Party Congress in Beijing. Even stricter travel and internet controls are being put in place to ensure the coronation of President Xi as absolute ruler goes without a hitch.
And Europe is facing up to a new crisis in Spain where tensions with independence-minded Catalonia are intensifying. The consequences may push Brexit issues into the background. The financial consequences of a unilateral declaration of independence may be severe, not only on the region, but on Spain as well.
Finally, NAFTA re-negotiations are getting crude. US trade decisions are up-ending finely balanced trade deals. History's lessons are being ignored in Washington in preference for partisan points-scoring. One consequence is likely to be a fairly quick shift, to the US being noncompetitive on world markets and that may have significant implications for many countries. A new world, without the US at the centre, is being created - by the US.
In New York, the UST 10yr yield is up +2 bps at 2.36%.
The price of crude oil is sharply lower and now under US$49.50 a barrel which is almost a -US$2 drop, while the Brent benchmark is down to US$55.50. OPEC is saying 'extraordinary measures' may be requires to keep the oil; price in a range thay can live with.
The price of gold is basically unchanged today, still at US$1,272/oz.
And the Kiwi dollar will start the week lower at 70.9 US¢, a four month low. On the cross rates we are pretty much unchanged at 91.4 AU¢, and 60.4 euro cents. Our TWI-5 index is now at 73.9 and the first time it has been under 74 since May.
If you want to catch up with all the changes on Friday 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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