Here's my summary of the key events overnight that affect New Zealand with news that India is to make a massive recapitalisation of its state-owned banks.
But first, sales of new single-family homes in the US in September climbed to a new all-time high and were a remarkable +17% higher than the same month a year ago. This was miles above market expectations. At the same time, new orders for key American-made durable goods also rose more than expected in September and shipments rose for an eighth straight month. Together this activity will be a strong mitigation of the storm effects that hit some regions of their economy in late August and early September.
The Bank of Canada reviewed its policy rate and has kept it at 1%. It raised its 2018 growth forecast to +3.1% and said their economy is running at "close to its potential". However they noted some remaining slack in their labour markets saying high growth can continue without inflation being "materially above target", for a little while yet.
India has announced that it will inject a staggering NZ$45 bln into its state-controlled banks over the next two years. This is much higher than has been previously signaled and shows a determination to drive economic growth - already high - on an even faster track. Credit rating agencies like the move which comes after some criticisim of the Modi government's approach to growth and reform. India is Asia’s third-largest economy after China and Japan, the world's seventh largest (although surprisingly the world's third largest on a PPP basis).
In what might seem an odd move by a country that holds more than US$3 tln in USD denominated reserves, China is returning to international bond markets for the first time in 13 years, with a US$2 bln offering of USD bonds. Bankers have begun marketing China’s five- and 10-year bonds to investors, primarily in Asia and Europe, and the securities are expected to price on Thursday.
And China has released the names of the the seven men (yes, all men) who will rule China for the next five years in their new Politburo Standing Committee. Well, actually, one man will, but these seven are the next level down and there is no successor to Xi among them. Xi looks like he is now in there at the top, for life.
In Germany, business confidence has reached a new all-time high.
In Australia, their CPI inflation rose by +1.8% in the year ending September 2017 and rose +0.6% for the September quarter alone. Inflation growth has slowed somewhat in 2017 in Australia, but it is up from +1.3% pa in the year to September 2016.
In New York, the UST 10yr yield is up yet again, now at 2.45%, a new six-month high. Markets are watching to see if it can hold above 2.40%.
The price of crude oil is marginally lower today and now just over US$52 / barrel, while the Brent benchmark is just over US$58.
The price of gold is also down -US$3 and now at US$1,271 oz.
The Kiwi dollar has slipped slightly from this time yesterday, now at 68.8 US¢. And on the cross rates we have recovered somewhat against the Aussie to 89.2 AU¢, but slipped further against the euro to 58.2 euro cents. That puts the TWI-5 index down at 71.7.
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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