Here's our summary of key events overnight that affect New Zealand, with news we no longer worry analysts about our household deleveraging risk.
Firstly in the US however, the Fed's preferred measure of inflation hit its target of 2% in September. In fact, both the overall measure, and the core without-food-or-energy measure both hit that target, a rare double,
In China, their equity markets closed down sharply yesterday yet again, down -2.2% and making the cumulative fall more than -20% and moving into a bear market.
China is reported to be mulling a halving of its taxes on new cars as a way of stimulating their sagging economy.
And staying in China, it is clear now that authorities are starting to hard-target individuals who are avoiding their currency control limits. It had been a porous restraint essentially enforced on companies up until now. But the limits have gotten teeth for individuals who are trying to move funds out of the country.
In Germany, Angela Merkel has quit from a key party position, probably signaling that her time as German Chancellor is about to end.
Investment banker Morgan Stanley has released a new report calculating a Household Deleveraging Risk Indicator for ten developed countries, one of them New Zealand. That identifies modest risks for us, but high ones for Australia and Canada, as well as Sweden and Norway. The score for New Zealand is benign, while that for chart-topping Australia is a serious concern to these analysts. We struggle with structural vulnerabilities but are ok on the other stress indicators that others are facing.
In London, 3 month LIBOR has reached 2.5% which is its highest level in a decade. It is a key wholesale rate that has started climbing again in the past six weeks. It is a market shift our wholesale rates won't be able to avoid in the intermediate term.
The UST 10yr yield has turned back up a little and now at 3.10%. But their 2-10 curve is still at just +27 bps. The Aussie Govt 10yr is at 2.58% (down -1 bp), the China Govt 10yr is at 3.54% and also down -1 bp, while the NZ Govt 10 yr is at 2.55% and down -2 bps.
Gold is at US$1,225/oz a fall of -US$8/oz.
US oil prices are a little softer today at just under US$67.50/bbl. But the Brent benchmark is still at US$77.50/bbl. Russia has said it will keep its deliveries high in the immediate future.
The Kiwi dollar is starting today little-changed at 65.3 USc. On the cross rates we are at 92.4 AUc, and at 57.3 euro cents. That puts the TWI-5 at 69.8.
Bitcoin has actually moved today, its first non-trivial change in ten days. This time it is a drop to US$6,291, a -2.0% fall. 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 ».
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