Here's our summary of key events overnight that affect New Zealand, with news stresses are building (for different reasons) in two of the world's largest economies.
In the US this weekend we will get the October non-farm payrolls report. Analysts are expecting a gain of +193,000 as a bounce from the rather weak September result. Today the ADP employment report showed a healthy gain of +227,000, boosted by strong rises in hospitality. the health sector, and other office-type professional jobs.
And the American employment cost index was up +2.8% year-on-year in September, the same rise as for June. There may be wage-push inflation building now, a trend sure to be being watched by the Federal Reserve. Another interest rate hike is expected there before the end of the year.
Wall Street likes this data and is up 1.7% today, meaning it is even over the past week and risk is back 'on'. Benchmark interest rates are rising too. Swelling American deficits will also mean they will have to pay more for their public debt, rapidly increasing the share interest takes from taxes (and soon more than the US Defense budget).
In Canada, their August reading for economic growth saw it pushed up to +2.5% and better than was expected. That is their seventh consecutive month of growth. Another interest rate hike is expected there as well, also before the end of the year.
In China, their economic expansion continues to slow. Official data out shows factory expansion at a virtual standstill, while service industry expansion is cooling but is still at a healthy level. Both measures are expanding at their slowest rate in over a year.
Beijing is reacting. Further stimulus measures are on the way, as the current piecemeal approach isn’t being credited as working well enough. It appears that China's leaders have no intention of caving in to US trade pressure, so are hunkering down for a longish battle in the overall trade wars.
One element of that is playing out in New Zealand right now. Delegates involved in the final round of negotiations for the China-backed Regional Comprehensive Economic Partnership (RCEP) are here and have reportedly agreed on the dispute settlement chapter. With the TPP now ratified, multilateral trade deals elsewhere are getting renewed impetus.
In the EU, both their inflation and unemployment rates came in exactly as analysts were expecting. Inflation is at +2.2% in October (it was at +1.4% a year ago), while unemployment was at 8.1% in September (down from 8.9% a year ago).
In Germany however, retail sales have taken a bit of a dive and are actually down -2.6% year-on-year to September on an inflation-adjusted basis.
New Zealand has again topped the World Bank's list of the easiest place to do business. We don't score high in every sub-category, but we are the place where it is fastest to establish a new business, much to the delight of some fraudsters. We score 60th in 'trading across borders', and 45th in 'getting electricity'. For 'resolving insolvency' we are 31st.
The UST 10yr yield is +5 bps higher today at 3.15%. And their 2-10 curve is now at +27 bps. The Aussie Govt 10yr is at 2.63% (up +4 bps), the China Govt 10yr is at 3.53% and down -1 bp, and the NZ Govt 10 yr is up +2 bps at 2.57%.
Gold is at US$1,214/oz and a decline of -US$9/oz.
US oil prices are softer again today and now under US$66/bbl. The Brent benchmark prices are just over US$75.50/bbl. Rising supply and falling economic growth are factors pushing the price lower.
The Kiwi dollar is starting today a little softer at 65.2 USc. On the cross rates we are at 92.2 AUc, and at 57.7 euro cents. That puts the TWI-5 back to 70.
Bitcoin is a little higher today at US$6,323, a gain of about +½%. 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 ».