Here's my summary of the key events over the weekend that affect New Zealand with news from around the world
Firstly, China’s full-on and impressive construction of underground transit systems in cities all over the country may be easing. There are reports funding has been pulled for some projects. If China is taking a more discriminating approach to infrastructure growth, it marks an about-turn. The burgeoning public debt required for all these systems will be behind the re-think.
And staying in China, they are claiming 'stability' and 'control' of house prices and to be sure there is some sign of that in the major cities. But prices are still rising fast in the next tier cities. On a month-on-month basis to October, new residential housing prices fell in 9 of the 15 largest cities. But of the 70 large and medium-sized cities surveyed, home prices in 50 cities rose month-on-month, compared with 44 in September. And don't forget, these prices are all for leasehold situations. 'Homeowners' never own the land in China.
In the US, housing starts surged +14% to an annual rate of 1.3 mln units. That was the highest level since October 2016 and also the second-best reading in 10 years. September’s sales pace was revised up to 1.1 mln units.
In Australia, ASIC said it will look into potential risks to shoppers from the boom in new online buy-now-pay-later platforms such as Afterpay. Consumer groups worry these services escape laws designed to protect customers. Merchants are promoting these systems and strong growth in the peak Christmas shopping period is anticipated. The largest provider, Afterpay, does not charge interest, so it is not covered by consumer credit laws. It makes about 80% of its revenue from fees charged to merchants, and the remainder mainly from late payment fees from buyers caught by their impulses.
Auction clearance rates have been high in Australia, but they have been falling in the past four weeks. CoreLogic reports that it was "only 65.4%" in the week that included this weekend. That is down from about 80% a few months ago. (For comparison, we reported an Auckland auction success rate of 25% in our latest survey. We will have another local update tomorrow.)
And again in Australia, the RBA wants banks to push back against Visa and Mastercard who are grabbing most of the transactions for tap-and-go. And those come with high costs, payable by merchants to Visa and Mastercard. Which is why many small businesses resist using the systems. The RBA has threatened regulation if the banks don't open up the option to use the low cost eftpos system for contactless payments.
In New York, the UST 10yr yield is at 2.35%. And we should also report that the 5-10 inverted yield curve in China has disappeared and gone back to a slight positive curve.
The price of crude oil is up by more than US$1 today, now just over US$56.50 / barrel, while the Brent benchmark is just over US$62.50
The price of gold is sharply higher, up +US$17 at US$1,294 oz.
However, the Kiwi dollar will start the week much lower. We are now at 68.2 US¢. And on the cross rates we are at 90.1 AU¢, and against the euro at 57.8 euro cents. That keeps the TWI-5 index at 71.1, which is in fact an eighteen month low.
And the roller-coaster ride continues. Bitcoin has powered to a yet another all-time high, currently trading at US$8,026 having pushed up sharply in the past hour.
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 ».