Here's our summary of key events overnight that affect New Zealand, with news all eyes are now focusing on tomorrow's US inflation report.
Today, Wall Street's main indexes are lower for the first time in three sessions as caution builds in ahead of that crucial data on inflation tomorrow, a root cause of the recent sell-off. The expectation benchmark is +1.9% pa and variations will likely set market directions for a while. Meanwhile, the US dollar is falling against its main trading partners.
Despite the recent bumpy ride, the new boss of the US Federal Reserve said today that the track of gradual rate rises will go ahead as he seeks to push to 'normalizing''.
It has been alleged in a claim to both the SEC and CFTC that the widely quoted VIX volatility index is being manipulated. The host CBOE refutes the claim saying it can't happen.
American household debt in the year to December 2017 rose +4.5% to reach US$13.2 tln. The mortgage component, which makes up 68% of this debt, rose +4.5%, car loans rose +5.5% although they only make up 9% of the total. And credit card debt rose +7.1%, making up 6% of the total debt. Student loans account for 11% of household debt and they rose +5.2% in the year. On a population and inflation adjusted basis, this household debt is up +1.7% real. US GDP grew +2.3% in the same period.
Booming airfreight and passenger levels are translating into improving profitability at airlines, a sector that has long struggled on that front. But it is also drawing higher pay claims from staff. Embedded costs are rising and that will make for a brittle future when the inevitable downturn comes.
In Australia however, their central bank says it may be a while before their improving economy delivers meaningful wage rises.
In New York, the UST 10yr yield has paused and is now at 2.85%, awaiting that US CPI data.
Measures of market volatility have settled back further today.
Gold is continuing to move higher. This morning it is at US$1,327, up another +US$3.
Oil prices are down with the US benchmark now just over US$59/bbl and the Brent benchmark over US$62.50/bbl. American shale production is growing faster in 2018 than it did even during the boom years of $100 a barrel oil prices from 2011 to 2014, according to the IEA.
This morning, the Kiwi dollar opens up nearly ½c at 72.9 USc. On the cross rates we at 92.8 AUc and 59 euro cents. That leaves the TWI-5 at just on 73.9 and still within its 2018 narrow range.
Bitcoin is at US$8,630,US$8,760, a -1.5 fall from this time yesterday.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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