Here's our summary of key events overnight that affect New Zealand, with news investors have downgraded their fears of how much damage the US can do to China or the world on trade.
Today, world shares hit a more than six-month high after China moved to boost domestic consumption. It is a rally driven by investor bets the latest US-China trade skirmishes are unlikely to dent global growth. Yesterday, Shanghai was up a remarkable +2.5%, and Hong Kong was up +1.7%. Other exchanges showed similar enthusiasm. Today, Wall Street is up more modestly.
Early data for the US September PMIs shows another pullback in their expansion with the composite index falling to a 17 month low. The same data shows prices rising faster and jumping sharply.
Canada’s overall inflation rate eased for the first time in four months to +2.8% in August, but another uptick in core measures of inflation suggest that further Bank of Canada interest-rate increases remain on track.
Canada's retail sales rose +3.7% in the year to July, beating estimates, especially for sectors that don't include cars.
The Brexit re-negotiations are going badly for the UK, with the UK wanting a deal the EU won't actually even consider. The chances of a hard Brexit are rising.
In Australia, ratings agency S&P has upgraded their AAA rating from negative to stable The positive review comes two years after S&P told their Government to get its house in order over budget repair, downgrading Australia to negative watch over fears it would not be able to get the budget back to surplus. Since then, a multibillion-dollar boost to income taxes on the back of bracket creep and high migration levels, and company tax receipts, through higher company profits, have allowed the government to bring forward its expectations of a budget surplus to 2019-20.
On this side of the ditch, ratings agency Moody's has affirmed the NZ Government Aaa rating. The outlook remains Stable. Moody's say they expect that "New Zealand's very strong institutions will continue to define the framework for highly effective policymaking that prevents or mitigates the credit implications of potential external and domestic shocks. In particular, the government's strong fiscal position and monetary policy flexibility provide ample capacity to counter shocks". S&P and Fitch both rate the New Zealand Government as AA+ Stable, one notch lower than Moody's.
The UST 10yr is unchanged today at just on 3.07%. Their 2-10 curve is at +26 bps, +5 bps higher in the week. The Aussie Govt 10yr is at 2.70% (down -1 bp overnight), the China Govt 10yr is at 3.71% and also down -1 bp, while the NZ Govt 10 yr is at 2.70%, down -2 bps. New Zealand swap rates have risen +5 to +10 bps over the past week.
Gold however is weaker from yesterday and down -US11, now just on US$1,196/oz in New York, but almost the same level as this time last week..
US oil prices are little changed today from yesterday and now just over US$70.50/bbl. The Brent benchmark is now just over US$78.50/bbl. The US rig count slipped a few this week.
The Kiwi dollar is ending the week firmer at 66.8 USc, and up much more than +1c in the past seven days. On the cross rates we are marginally firmer at 91.7 AUc, and at 56.8 euro cents. That puts the TWI-5 at 70.3 and almost at its average over the past 3 months.
Bitcoin is now at US$6,693 and that is a net gain of +3.2% over the past week. This rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».