Here's my summary of the key events overnight that affect New Zealand with news an Aussie banking Royal Commission may be closer than expected.
But first, US consumer spending jumped markedly in September, rising +1.0% from August, +0.6% in real terms. That is the fastest rise in over eight years. On an annual basis, PCE, the Feds preferred measure of inflation, was up +1.6% which is below their targeted +2%.
The latest regional Fed survey, this time from the oil patch, has seen a reversal of sentiment, with the Dallas Fed saying its region is now surprisingly bullish.
Canada is expressing concerns about "troubling" US negotiating proposals in their NAFTA renegotiations. They are preparing "for anything". Basically, no-one seems to know what the US really wants - and that probably includes the US negotiators.
And across the Atlantic, there may be existential threats to the EU in Spain, but actually everyone else seems increasingly optimistic, consumers especially. They haven't been this bullish since just before the GFC.
London-based banking giant HSBC has said its huge restructuring drive is finally bearing fruit. The behemoth has seen its profit rise in recent months thanks first and foremost to its brisk Asia business. Overnight it reported a US$14.9 bln profit for the nine months to September, a +41% jump.
And in China, their big four SOE banks posted double-digit increases in lending income in the third quarter, validating some of the earnings optimism that has fueled a rally in their shares this year. Their gains have come at the expense of smaller rivals, and under the umbrella of regulatory restrictions on competitors.
In Australia, it looks like the Government is about to lose support from three of its own members who will cross the floor to vote for the ALP Banking Royal Commission.
In New York, the UST 10yr yield has slipped further and is now down to 2.37%. Across the Pacific, Chinese Govt bond yields jumped unexpectedly with their 10 yr now up to 3.89% - and their 5 year is leaped even higher, now at 3.94%. Fear of new market interventions seems to be driving the sharp rises in yields. These changes came as Asian stock markets had a broad sell-off yesterday.
The price of crude oil is basically unchanged today and is still just over US$54 / barrel, while the Brent benchmark is just over US$60.50.
The price of gold is up +US$7 at US$1,274 oz.
The Kiwi dollar is basically unchanged from this time yesterday but there is a whiff of softness about. We are at 68.7 US¢. And on the cross rates we are at 89.5 AU¢, and against the euro at 59.1 euro cents. That puts the TWI-5 index just under 71.9.
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 ».
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