Here's our summary of key events overnight that affect New Zealand, with news that the denouement of bitcoin seems to be happening.
But firstly in the US, there was a very positive PMI report out earlier today from the ISM. They say new orders, production, and employment continue to expand. But supplier deliveries are slowing, raising backlog issues. They also see raw material inventories growing and prices rising at a faster rate.
North of the border, Canadian negotiators are becoming frustrated with the NAFTA talks and the US's zero-sum view of trade. As the talks drag on, the prospects for a resolution are dimming.
In Argentina, their central bank is fighting high inflation - and apparently losing. It hit 21% in 2017, far above the target 15%. But yesterday, the bank relaxed its goals and sent markets a very mixed signal about their commitment to fighting high inflation. It had an official cash rate of 28.75% but cut it recently to 27.25%.
There are elections next year in India. This year the Government is getting prepared and today's central government budget has an unusual policy - that Indian farmers are to be paid at least paid at least 1.5 times the cost of their crops as part of a program to double farmer incomes by 2022. India may need higher import duties to achieve that.
Global air passenger travel was up +7.6% in 2017 compared to 2016 with international travel up +7.9%. In the Asia/Pacific region they were up +9.4%. December month growth was a little softer than these annual growth rates however. And remarkably, the largest global share of international air travel is from the European region, accounting for nearly a quarter of all air travel. Asia/Pacific is next at almost a fifth. North Americans only account for a twelfth of international air travel.
In Australia, APRA has released an interim report on its culture at banking giant CBA. The report essentially says nothing other than big banks are complex beasts. They are trying to understand the dynamic between CBA’s financial success and any shortcomings in its responsiveness and management of risk. They say after all the detail work, surveys of 10,000+ staff, interviews with 100+ senior managers and targeted focus groups, and consultation with outside agencies, they don't have anything significant to report yet.
The UST 10yr yield is unchanged at 2.74%. The equivalent 10yr China sovereign bond is down however, just a little at 3.93% (-1 bp). The equivalent NZ 10yr sovereign bond is up +1 bp to 2.94%.
Oil prices are up about +US$1 today and now just over US$65.50 a barrel, while the Brent benchmark is now under US$69.50.
Gold is marginally firmer at US$1,342/oz.
The Kiwi dollar starts today higher however at 74 USc. On the cross rates there are also small rises and we are now at 92.1 AUc, and against the euro at 59.2 euro cents. That puts the TWI-5 just on 74.6 and its highest since early October.
Bitcoin is now just under US$9,000 and is now at US$8,971 a steep -10% drop in the past 24 hours. It looks like markets have decided the US$10,000 level is not sustainable and there is a rush to the exits. Not helping is a new Facebook ad ban for the cryptocurrency and India's regulatory clampdown.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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