Here's our summary of key events overnight that affect New Zealand, with news the TPP is gaining new momentum.
Singapore has become the latest to ratify - New Zealand has said it will do so by the end of the year. And now there is news that plans are afoot to expand the group from 11 to include Thailand and Columbia. The TPP is an impressive trade agreement if only for the reason that it contains strict labour and environmental obligations usually absent from other such free trade pacts. FOMO is sucking in these and other signatories.
In the US, the number of people filing for jobless benefits dropped to almost a 50 year low last week as their labour market continues to expand even as trade tensions are casting a shadow over the economy's outlook. That low benchmark however was on a seasonally adjusted basis. On an actual basis, the number has been rising since the low point in May.
A Presidential criticism of the US Fed's indications that a gradual raising of policy rates is their plan has seen both benchmark bond yield's fall and the US dollar go soft. Political interference in monetary policy is very rare in the US and it now uncertain how the Fed, and its newly appointed chairmen will react to the pressure. The comments also turned Wall Street negative.
In Canada, an early indication of their jobs market in June shows worrying data. The huge payroll processor ADP is reporting that more than -10,000 jobs were lost in the month, a sharp reversal of the +26,000 gained in May. In June 2017 this survey reported a +48,000 gain.
And staying in Canada, their federal housing agency has announced new rules to help the self employed qualify for a mortgage.
In China, the central bank set its Yuan:USD currency rate at 6.7 to the greenback in an acceleration of its depreciation and an eleven month low. Offshore markets have marked it down even further, currently at 6.8.
And the Chinese central bank is loosening rules, trying to encourage banks to "invest" in more sub-prime debt, especially that of local authorities. Banks however have expressed scepticism about their risks from this policy push. The whole move smells of official urgency to ameliorate a coming slowdown.
The UST 10yr yield is falling again and now at 2.85%, down -3 bps. The Chinese 10yr is at 3.50% (unchanged) while the New Zealand equivalent is now at 2.87%, also down -3 bps.
Gold is lower yet again at just on US$1,224/oz in New York. In London it closed at just US$1,218/oz. These are both about -US$6 falls taking the yellow metal's price back to levels we last saw almost 18 months ago. The World Gold Council is calling this an "attractive entry level".
We should also note that the price of copper has hit a one year low overnight. Its descent has been steep recently. It is down more than -13% over the past five weeks. Copper - often called Doctor Copper - is an important leading indicator of emerging markets growth trends. So this fall is ominous.
US oil prices are a little higher and now just over US$69/bbl. The Brent benchmark is softer, now just over US$72/bbl.
The Kiwi dollar is starting today softer but more in line with where it has been over the last week, at 67.6 USc. On the cross rates however we are holding at 91.7 AUc, and at 58 euro cents. That puts the TWI-5 at 71.2.
Bitcoin is holding at its higher level at US$7,426 which is essentially unchanged from this time yesterday.
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