Here's my summary of the key events overnight that affect New Zealand with news regulators are feeling happier about their moves to wind back QE.
Firstly, we should report that EU industrial production was up +3.9% in August from a year ago, with an impressive +1.4% spurt from July. This was much stronger than expected (+2.6%) and comes at a time the ECB is pondering the timing and wisdom of scaling back its QE program. Today's data may give it some spine.
Meanwhile, a US Fed official says their QE unwinding program is going well, in part because of the US economy "is on a solid footing". The latest indication is that US growth is running at +2.5%. In fact, some analysts are predicting real annualised quarterly GDP growth to exceed +3% in both Q3 and Q4. The first estimate of US Q3 GDP comes on October 28.
And there is another hint that US inflation is picking up. The latest producer price index data shows it up +2.6% but within that there has been a much faster rise recently in the price of goods which are up +0.7% in just the last month to September.
And remember the Houston storm and the resulting floods? Unconstrained development, much of which was on flood-prone land has a price, even if it was not in the original cost of the houses. Not only were homeowners unable to buy flood insurance, after the damage opportunistic 'investors' are now only offering about 40% of their pre-storm values. "Affordability is rising in Houston" !!
And another US Fed member said overnight that emerging market economies were vulnerable to heavily-indebted corporate sectors as global interest rates rise, and singled out China as a source of particular concern.
China of course doesn't agree. Overnight they released data showing car sales up +5.7% in September. And separately, data shows that their services deficit with the rest of the world continues to grow, offsetting their strong goods trade surpluses. That services deficit is growing fast, up +20% compared with the same period a year ago.
In Japan, a snap election forced on Prime Minister Abe looks like it will turn out well for him. The latest polls show him cruising to another good win, with his opponents who forced the election roundly trounced.
In New York, the UST 10yr yield has opened slightly lower at 2.33%.
The price of crude oil is also lower today by nearly -US$1 and now just under US$50.50 a barrel, while the Brent benchmark is just over US$56.
The price of gold is marginally higher at US$1,292/oz.
And the Kiwi dollar is noticeably higher as well, up ½¢ at 71.3 US¢. On the cross rates we are also slightly firmer at 91.1 AU¢, and at 60.2 euro cents. Our TWI-5 index is now at 73.9.
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 ».