Here's our summary of key events overnight that affect New Zealand, with news that markets are extending their losing streak.
And in a change of some irony, we are seeing large volatility in equity markets just as volatility has disappeared from bitcoin!
Shanghai was down -2.3% yesterday, erasing some of the +8.5% rise we have had over the past three days. The level it ended at yesterday is still a -27% fall since the start of the year. These are enormous value changes.
Wall Street was down as much as -1.5% in morning trade today but those losses are being pared back and it is now down just -0.5%. Today's level of the S&P500 is -3.0% lower in a week, but is a small gain of +1.3% since the start of the year.
Today's sentiment shift is driven by weak data everywhere, and a consequent risk-off tone. Sagging earnings outlooks among some large companies also weight on markets. Benchmark bond yields are retreating and rate curves are narrowing.
Updated data from Mexico shows a slowing in the growth of industrial output there. It was up less than +1.7% year-on-year in August and well below expectations (+1.9%), and much slower than the +3.3% growth recorded in July.
Similarly, data out in the Richmond Fed district also records a slowing. Their data is for October and the expansion recorded came in well below expectations, itself a discount to the growth recorded in September. It does report growing inflation pressure however.
In Canada, their central bank is widely expected to raise its benchmark overnight interest rate by a quarter of a percentage point tonight in response to solid economic growth and the new NAFTA deal.That will take their benchmark rate up to 1.75% and the same as ours. But it will still be below the US Fed rate of 2.25%, itself expected to rise at least once more this year.
Perhaps one small bright spot is that Japanese machine tool orders grew at a faster positive pace in September than earlier indicated, but this is just a small blip in an overall growth rate that has been declining for most of 2018.
Also somewhat underwhelming is EU consumer sentiment. It has been negative for so long, it seems normal. The September data has come in a little less negative and still well above its long run average. But there is no escaping the fact there are more EU consumer pessimists than optimists.
And staying in the EU, Brussels has delivered a rare formal rebuke of Italy's budget plan, requiring it to make changes to stay within EU deficit rules.
The latest update for the share on trade transactions being done in the Chinese yuan shows a further retreat, now down to under 1.9% in September. That is a tiny share indeed and down from a tine 2.1% in August.
In an odd move in the time of the Hayne Commission and the drive for corporate and regulator transparency, the Australian Tax Office is building a set of secret agreements with lawyers and accountants to stop them promoting tax 'exploitation' schemes, arrangements that can range from illegal evasion, to tax reorganisation using legal minimisation structures. These secret schemes allow the organisers to avoid public scrutiny.
The UST 10yr yield will start today at 3.15% and down -4 bps from this time yesterday, with their 2-10 curve now under +28 bps. The other yields we follow have moved differently; the Aussie Govt 10yr is at 2.68% and down -3 bps, the China Govt 10yr is at 3.60% and up +1 bp, while the NZ Govt 10 yr is at 2.68% and down -1 bp.
Gold is at US$1,231/oz and up +US$9 overnight.
Oil prices have dropped dramatically today on indications the Saudi's are raising output. US oil prices are down more than -US$3/bbl to just over US$66/bbl. The Brent benchmark has fallen even more and is now just over US$76/bbl.
The Kiwi dollar will start today little changed at 65.6 USc. On the cross rates we are at 92.6 AUc, and at 57.1 euro cents. That leaves the TWI-5 at 69.9.
Bitcoin is now at US$6,431, little-changed from yesterday. This rate is charted in the exchange rate set below.
This chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».