Here's our summary of key events overnight that affect New Zealand, with news the financial service industry is being shaken up in multiple ways in Australia.
But first, the American trade deficit for both goods and services narrowed sharply in March as exports increased to a record high. Some see this as a boost for a flagging economy; rather it might be customers buying soybeans and other to-be-hit products before tariffs kick in. However commercial aircraft also contributed to the strong result. More interesting however was the sharp drop in imports. Capital goods imports dropped more than consumer goods, but both by much more than was expected.
In separate data, durable goods order levels came in at the expected level.
American freight movements are rising fast and orders for heavy duty trucks have never been higher. Some major freight haulers are now turning to electric trucks in a big way, some based on hydrogen fuels.
Meanwhile in Canada, they posted a near-record high trade deficit in goods. Both imports and exports were up, but the rise in imports took them to a new record high, driven primarily by vehicle imports.
Yesterday we reported a sharp slowdown in airfreight growth. Today the passenger travel data was released showing a rising rate of growth, up +9.5% from the same month in 2017. The international component, which is approaching two thirds of all travel, was up by a remarkable +10.6%. The Asia/Pacific part was up by +11.6%. The world is on the move.
In Switzerland, they are having a referendum vote on a 'new' idea on how money is to be created in the country. The vote is due on June 11 (NZT). Their central bank is warning of the economic dangers if the idea. There are no polls indicating support or otherwise yet but the Swiss Franc is at its weakest point for the year and near that since 2015. If voted in, it will certainly sideline their currency.
A week ago we reported that Argentina had hiked its official interest rate by +3.00% to 30.25%. Today they did it again, taking that official rate to 33.25%. They are getting serious in tacking their +25% inflation rate. Their central bank said today, they may have to raise rates even further.
In Australia, their series of official inquiries and investigations has generated a remarkable demand for lawyers and that is spilling over into normal commercial life with an availability drought and a cost spike.
And a new law will require their regulator ASIC to recover its costs of operation by charging individual financial advisers for its regulation and enforcement activities. It seems likely that this will price independent advice out of the reach of most, and dependent advice channels are likely to wither as well even if some major ones absorb the cost. "Free" advice will only be offered by big-brand (bank) channels. In the end 'honest' advisers will pay for the costs of weeding out the 'dishonest' ones. The Aussie financial advice sector is likely to change dramatically, and some of it unintended.
The UST 10yr yield is now at 2.95%, down -2 bps from this time yesterday. The Chinese 10yr is at 3.67% (down -1 bp) while the New Zealand equivalent is at 2.83% (also down -1 bp).
Gold is at US$1,314/oz in New York. That is up +US$7.
Oil prices are up again, now just under US$68.50/bbl in the US and the Brent benchmark is just over US$73.50/bbl.
The Kiwi dollar is a little higher this morning at 70.4 USc. On the cross rates we are up at 93.5 AUc and 58.7 euro cents. That puts the TWI-5 on 72.9, and almost exactly where it was at the start of the week.
Bitcoin is at US$9,675 and +5.6% above the level at this time yesterday.
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