Here's our summary of key events overnight that affect New Zealand, with news China may be getting ready to launch a new infrastructure spending boom.
But first, the latest update on US consumer price inflation shows levels unchanged at +2.4% pa in November, held back by a sharp decline in the price of petrol (-4.2%). But underlying inflation pressures remained firm amid rising rents (+3.2%) and healthcare costs (+2.4%). This will underpin the next US Fed rate rise.
In China, company default risk has climbed to the highest level in 13 years as Beijing seeks to rein in its post-crisis construction boom, according to Moody's Analytics.
But perhaps that boom is to get a new impetus. In the past ten years China has built 234 new airports. But it is just not enough for their exploding demand for air travel. Now their aviation regulator is planning to raise that to 450 in the next 15 years in what will be a new large infrastructure spending program. For perspective the US has 503 airports that serve commercial airlines. New Zealand has 21.
The EU and Japan will launch the world’s largest free trade zone in February next year after their economic partnership cleared a final hurdle overnight in the EU parliament.
In the London parliament, a no-confidence vote is underway that we will update here when the result is known. Update: PM May has 'won' the confidence vote 200:117.
Equity markets are stronger just about everywhere today. It started in Tokyo yesterday with their index up +2.2%. Hong Kong was up +1.6% although Shanghai didn't get the bug, rising just +0.3%. But overnight in Europe, most markets gained close to +2%, partly on the relief the Italians aren't about to do anything silly on their budget deficit. And today Wall Street is up +1.6%.
Today's new-found optimism by US investors is reflected in a survey of business managers in the US. Although businesses are less optimistic about the outlook for the coming year than they were 12 months ago, many still expect sales, hiring and investment to rise in 2019.
The UST 10yr yield will start today much firmer at 2.91% as the prospect for the December US Fed rate hike beds in. Easing trade tensions are helping too. And their 2-10 curve has risen back to just over +13 bps. The Aussie Govt 10yr is at 2.46% (and up +1 bp since this time yesterday), the China Govt 10yr is at 3.30% and unchanged, while the NZ Govt 10 yr is at 2.51%, and up +3 bps.
Gold is little changed at US$1,245/oz.
US oil prices are marginally firmer today to be just over US$52/bbl. The Brent benchmark is now just under US$61/bbl.
The Kiwi dollar is starting today softer all round at 68.5 USc. On the cross rates we are also softer at 94.9 AUc, and at 60.3 euro cents. That puts the TWI-5 down to 73.2 and that is a two week low.
Bitcoin is firmer today at US$3,428 which is a +2.5% rise in the last 24 hours. 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 ».