Here's our summary of key events overnight that affect New Zealand, with news of a new first-home buyer program in Victoria. (We are passing on coverage of the Davos circus this morning. It's everywhere else.)
First in the US however, sales of new single-family homes fell more than expected in December, recording their biggest drop in nearly 1½ years. But prior months included replacement sales for flood damaged homes. However the December 2017 level is +14.1% higher than the same month a year ago.
In Canada, their retail sales were up +6.5% in November from the same month last year. Part of that is from rising petrol prices however. But on a 'real' basis, the rises is still a healthy +4.5%. Sales of electronics and appliances were a standout, up a remarkable +23.4%. Canadian consumers are feeling their oats.
China has reported that its tax revenues rose +7.4% in 2017 (the combination of central and local government fiscal "revenues") to US$2.7 tln. (For perspective, Federal, State and Local tax revenues in the US amount to more than US$6.5 tln.)
In Europe, as their economic indicators hit new highs, the ECB is under pressure to end stimulus sooner than it planned. Today it reviewed its policy positions and left everything unchanged. But the pressure is definitely on and Mario Draghi bit back at the US Treasury Secretary over his cavalier attitude to trade.
The UN agency UNCTAD is reporting a sharp drop in 2017 outbound foreign investment. It fell -27% in 2017 after spikes in 2016. Flows to developed countries took the biggest hit. North America saw a drop by a third, Europe suffered a drop by more than a quarter. These falls contrasted with growing world trade. China however attracted a record level of foreign direct investment, putting it just behind the US.
In Australia, the Victorian government is launching a shared-equity assistance program for first-home buyers. They need to have at least 5% for a deposit and the State government will apparently stump up the rest to a 25% deposit. The government then shares the equity proceeds in the original proportion when the house is sold. The home buyer makes all the payments. There are income caps for households that apply. All good for the taxpayer if capital gains are strong. It is in the State government's interest to keep house sales bubbling along as they clip the stamp duty ticket at an average of AU$40,000 in Victoria for a median-priced house.
Standard & Poor's have held the Aussie credit rating at AAA with a negative outlook. But they have warned that it could be lowered in 2019 if the progress towards a budget surplus falters.
The UST 10yr yield is marginally lower at 2.63% (-2 bp). The equivalent 10yr China sovereign bond is unchanged at 3.96%. The equivalent NZ 10yr sovereign bond is down another -2 bps to 2.93%. The surprise low inflation rate yesterday has also seen local swap rates drop. In fact at 1.97%, our one year swap rate is a record all-time low.
Oil prices are up further to be just under US$66 a barrel, while the Brent benchmark is now under US$71.
Gold is up another +US$4 to US$1,361/oz.
The Kiwi dollar lost a bit of ground against all major trading partners on the CPI data and is now back to 73.7 USc. On the cross rates there is shrinkage on the day as well. We are now at 91.1 AUc, and against the euro at 59 euro cents. That puts the TWI-5 at 74.2, a drop of about -50 bps.
Bitcoin is now at US$11,168, +2% higher than where it was at this time yesterday.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».