Here's our summary of key events overnight that affect New Zealand, with news our currency has taken a tumble against all trading partners.
But first, Canadian home prices rose moderately in April as Vancouver hit another record high, but the rate of appreciation continued to decelerate amid softening sales and higher interest rates.
In Europe, markets are awaiting data on Q1 growth in Germany. They think the results will be less than impressive.
In China, reports are surfacing of an increase in defaults by corporates over their bond obligations. The numbers are not huge, up to 15 instances so far this year, a rise from 12 in the same period last year. But what is unusual is that some of these firms now involve local government owned enterprises.
In India, inflation is picking up and is now at +4.6% pa, up from 2.5% in April 2017. Markets are expecting more official rate rises, and that is giving bond investors there some big losses.
We should also note that a trade of soybeans from Argentina to Malaysia last week, one that was unremarkable in every respect, except it was the one of the first, non-test, use of the blockchain for a letter of credit transaction. It all happened within 24 hours, compared to the normal 5-10 day period traditional letter of credit processing takes. The parties involved were HSBC, ING Bank, seller Cargill, and the Malaysian buyer. The blockchain application used in this Cargill transaction is supported by 12 banks, which could help bring the technology to the market more broadly.The annual global use of letters of credit is a US$2 tln market.
And in more crypto news, CBA’s chief financial officer has quit and is off to work for a Hong Kong blockchain firm after less than a year in the role.
The UST 10yr yield is now at 2.99%, up +2 bps. The Chinese 10yr is at 3.71% (unchanged) while the New Zealand equivalent is at 2.73% (down -2 bps).
Gold is at US$1,314/oz in New York. That is down -US$4 today.
Oil prices are up and are now just over US$71 and the Brent benchmark is now just over US$78/bbl. And OPEC is reporting that the high stocks of crude in developed countries have all but disappeared. They claim their production cutbacks have turned the demand/supply situation in their favour.
The Kiwi dollar is very much weaker against all trading partners and now at 69.2 USc, a ½c drop overnight. On the cross rates we are down at 91.9 AUc and 57.9 euro cents. That puts the TWI-5 just under 71.7 and the lowest level this year. The Kiwi dollar has depreciated -1.6% this month alone. The spread of mycoplasma bovis may be behind the sharp drop.
Bitcoin is now at US$8,754 and that is up +1.7% from this time yesterday.
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12 Comments
Lets hope the Kiwi$ does not go too far south .
It will push up the cost of imports and more specifically , fuel prices.
This could coincide with a raft of administered price increases in the form of tax, levy and excise price increases .
If anyone thought we could not create inflation , they were sorely mistaken
Thursday (y.know, Budget Day) may well show the extent of any downside - the end of the beginning, perhaps. Diesel is already up fully 30c (pre-Xmas, around 98c/l at Caltex truck stops, now $1.29) and that's only one of a myriad of imports that are currently essential to our standard of living....
I know , diesel is up around 25% in just 120 days ............ thats massive .
Wait until this hike filters through to transport costs and impacts on the cost of tomatoes at Countdown.
I would tread wearily if I was Government thinking the consumer is a bottomless pit of money when it comes to fuel costs
It's a pity that the Nats didn't introduce the levy during their time in Govt, when oil was cheap and $NZ at a high. There would have been less pain that way. The increases would have been gradual, rather than the perfect storm at present.
But then, ideology trumps common sense.
yep, been saying that for years. Plus a levy on cars as they enter the market - to pay up front for the roads they immediatly occupy. At the moment I park my car on the road 24/7 at the cost of a rego. Rediculous when it occupies valuable realestate. No wonder public hasn't developed.
They key, like a lot of things in life, is use it or lose it. Keep using your eyes through a wide range of focal lengths. Plus maintain a high nutrition diet high in organic fruit and vegetables. What I have found is that the speed of transition is what suffers the most if I spend too long at one focal length. But I have kept deterioration as bay for now.
Goldman think that US bonds are going to go from the approximately 3% to 3.6% in 2019. That's a significant increase in a short span of time it if happens.
https://www.cnbc.com/2018/05/14/goldman-deficit-unemployment-rate-disco…
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