Here's our summary of key events overnight that affect New Zealand, with news the Americans are manipulating their currency to gain a trade advantage.
First however, American home resales fell and more than expected in December as the supply of houses on the market dropped to a record low, pushing up prices. Volumes were down -3.6% compared with the same month a year ago, but prices were up +5.8%. However the whole calendar 2017 was not so tame; volumes rose to an 11 year high. And at the end of the year the number of houses available for sale was -10% lower, and at the current sales pace, unsold inventory is its lowest since these records began in 1999.
And US manufacturers are reporting a strong start to 2018 with the PMI up to a 34 month high. Their service sector isn't going the same way however. It recorded a slip in expansion to a 9 month low and an expansion below that for factories.
In Europe, the same survey shows a much faster expansion is underway. Their manufacturing index is holding at a much higher level than for the US, and their services sector is even more positive and at a ten year high.
In Japan, their manufacturing survey shows good expansion as well.
US officials may have opened a second front in the trade war they are starting. Yesterday it was punitive tariffs on some imports, today it is an effort to drive down their currency. They are taking their 'America First' message to Davos, the center of globalisation. It probably won't work out well. Already Germany, India and China have pushed back, and the Americans risk uniting everyone against them. The strategy has all the look of bluster that is not well thought through.
And China is using its special authoritarian powers to muzzle its media over reporting corporate debt excesses. It doesn't like talk about HNA's debt stress, for example.
In Sydney, their public commuter train system is to be hit with a strike. Travel in the city will become chaotic.
The UST 10yr yield is unchanged at 2.65%. The equivalent 10yr China sovereign bond is down -1 bp as well to 3.96%. The equivalent NZ 10yr sovereign bond is down -5 bps to 2.95%.
Oil prices are up further to be just over US$65 a barrel, while the Brent benchmark is now over US$70.
Gold is up strongly by +US$19 to US$1,357/oz.
The US currency is noticeably weaker today and the Kiwi dollar is now up to 74.1 USc and back to levels we last saw in early August. The greenback's weakness may now be official US policy. On the cross rates there is little change. We are at 91.9 AUc, and against the euro at 59.8 euro cents. That puts the TWI-5 at 74.8.
Bitcoin is now at US$10,932, down -2.9% in the past 24 hours. And you can now combine your gambling risks; EPL club Arsenal is being sponsored by CashBet, who are promoting the ICO to the club's fans.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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