Here's our summary of key events overnight that affect New Zealand, with news central bankers are about to meet in Jackson Hole, staring at the end of the current long term expansion.
Firstly, Wall Street's equity markets are ignoring the signals and rose in yesterday's session, posting a modest +0.3% gain. And yesterday in Hong Kong and Shanghai, they were even more optimistic, with both markets gaining more than +1% on the day.
In Beijing, the newly re-elected prime minister of Malaysia delivered an unexpectedly pointed criticism of China, warning of "new colonialism" in their economic relations. This comes as China is trying to shore up its relationship with Malaysia.
In Europe, Greece no longer depends on European Union aid after overnight formally exiting its third and final bailout program, the first of which started in May 2010. The German's hailed the program a success and a sign of EU solidarity. But Greece still faces decades of debt repayment and economic recovery.
Germany is set to record the world's largest current account surplus of +7.8% of GDP, the third year in a row in 2018, despite growing international criticism of its export-focused growth model. China likes that it is in Germany's shadow on this one.
In Australia, there is political paralysis in Canberra with their Prime Minister under siege in his own party over energy and climate change policies. Despite wide public support for the Prime Minister's positions, many Liberal party members seem to want to risk a sharp right turn, and that may not be good for relations with New Zealand as it may push to the fore Peter Dutton, a rigid hard line anti immigrant minister.
In separate Aussie woes, another bank there, this time CBA, their largest, has suffered some widespread IT issues making online transactions unavailable for hours yesterday.
This is the week where the world's central bankers meet in Jackson Hole, Wyoming for their annual review. This year it will be a sober affair, clouded by risks in emerging markets, as well as a growing understanding that the current growth cycle may be about to come to an end and some of the largest economies have little ammunition to lean against the next downturn. Irresponsible fiscal policy in the US is the main risk.
On Wall Street's bond markets. the UST 10yr is down sharply at 2.82%, with the US 2-10 curve down to just +23 bps and its lowest since July 2007. This curve fall is about to be a major international talking point as the current expansion nears an unusual 10 year streak. The Aussie Govt 10yr is at 2.53% (down -1 bp), the China Govt 10yr is at 3.67% and up +1 bp, while the NZ Govt 10 yr is at 2.60%, unchanged.
Gold is back up by +US$12 and at US$1,189/oz in New York.
US oil prices are a little firmer today and now just above US$66.50/bbl. The Brent benchmark is now just over US$72/bbl. China is finding ways to keep the flow of Iranian oil coming, despite the threats from the US. It has even cut local petrol prices.
The Kiwi dollar is starting today little changed from yesterday at 66.3 USc. On the cross rates we are still at 90.5 AUc, and at 57.9 euro cents. That leaves the TWI-5 at 70.2, unchanged from yesterday.
Bitcoin is also little changed at US$6,465 and only marginally lower than this time yesterday.
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