Here's our summary of key events overnight that affect New Zealand, with news that both business and consumer sentiment is on the rise in more major economies.
But first in the US, consumer credit data will be released at about 9am today and we will update this item then. The data will be for November and will follow a +6.5% pa growth level in October. Analysts are expecting a +4.8% pa rise this time.
Updated: US consumer credit data has come in much stronger than analysts were expecting, rising +8.8% pa in November compared with the same month a year ago. The rise was an impressive +US$31.3 bln in the month compared with the +US$17.8 bln expected and the +US$20.5 bln in October. It has been banks, rather than second-tier lenders who have garnered most of this rise.
In Canada, a central bank survey there has found a broad rise in optimism in their business community.
In China, their central bank has removed more limits on cross-border flows of the yuan. Overseas salaries can now be paid in China’s national currency and foreign companies can use the yuan to participate in the domestic carbon-trading market. The measures are effective immediately. The central bank also clarified that onshore companies that issue bonds or stock in yuan overseas can transfer those funds back to China “to facilitate the day-to-day operation of the enterprise.”
If you have been following the travails of HNA, here is a very useful review of all their current woes.
In December, the EU Economic Sentiment Indicator rose again, more strongly than expected and continuing the upward trend that began in the autumn of 2016. It was a broad based improvement, primarily boosted by the services, retail trade and construction sectors. Among the largest euro-area economies, it rose strongly in France (+2.3) and Germany (+1.6) and, to a lesser extent, in the Netherlands (+0.7), while it remained unchanged in Italy (0.0) and decreased slightly in Spain (-0.8).
In Germany, factory orders in November have come in +8.7% higher than the same month a year ago and stronger than analysts were expecting, (although there was a slight dip from October). This continues a strong rising trend.
In Australia, their competition watchdog is baring its fangs. It is set to launch its first criminal cartel cases against a series of high-profile Australian companies seeking multimillion-dollar fines and up to 10 years' jail for senior executives. "2018 will be a very big turning point for cartel enforcement and cartel deterrence," ACC supremo Rod Sims told The Australian Financial Review. "We will very likely have three to four domestic-based criminal cartel actions in 2018. It is very unfortunate we need to take action against individuals but I think that is what is needed." Under Australian criminal cartel laws, executives can face jail terms of up to 10 years if found guilty and company fines of up to 10% of their turnover or three times the profit gained.
The UST 10yr yield is unchanged at 2.48% today. In China, the equivalent 10yr sovereign bond is yielding 3.92% (-2 bp) while the equivalent NZ 10yr sovereign bond is yielding 2.78% (+2 bps).
Oil prices are a little higher in the US today with the WTI benchmark now just over US$61.50 a barrel, while the Brent benchmark is just over US$67.50.
Gold is lower by -US$5 to US$1,316/oz.
This morning the Kiwi dollar is marginally firmer this morning at just on 71.8 USc, and on the cross rates it is at 91.6 AUc, and against the euro it's also higher at 59.9 euro cents. That puts the TWI-5 at 74.1.
Bitcoin has sunk faster today than yesterday, losing US$1,150 in 24 hours and is now at US$14,810, a 7.2% drop.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».