Japan machine orders dip; Singapore exports slump; EU ready to retaliate; Brexit wobbles intensify; US number one investor in Australia again; UST 10yr 2.66%; oil and gold up; NZ$1 = 68.4 USc; TWI-5 = 73

Japan machine orders dip; Singapore exports slump; EU ready to retaliate; Brexit wobbles intensify; US number one investor in Australia again; UST 10yr 2.66%; oil and gold up; NZ$1 = 68.4 USc; TWI-5 = 73

Here's our summary of key events overnight that affect New Zealand, with news markets are rising but the drivers are certainly not good data reports.

But first a reminder that it is the Presidents Day public holiday in the US and markets there are closed.

In Japan, machine orders inched lower in December as companies worldwide take a more caution stance in investment. Still, the result was not a bad as feared and this data helped the Tokyo stock exchange rise strongly yesterday.

Also rising strongly were equity markets in Hong Kong (+1.6%) and Shanghai (+2.7%). Rumors of a delay in the US tariff imposition on China bolstered sentiment.

However, in Singapore, they reported a sharp fall in exports. The overall fall was more than expected at -10% in January compared to the same month a year earlier and their largest drop in over two years. And it came after a healthy rise in December making the shift seem even more dramatic. The key driver was a -25% slump in their trade with China.

And in Europe, their Trade Commissioner has said the EU is ready to hit back 'hard' if the US unilaterally imposes punitive tariffs on EU cars.

And as a hard Brexit looms, major decisions are being taken. A major British political party has seen a splinter, major manufacturing closures are being readied in the UK, and banks are starting to move from London.

In Australia, the Americans have become the largest source country for foreign investment for the first time since 2013, surpassing China. Australian authorities approved more than 11,000 foreign investment applications involving AU$163 bln and mostly in the service sector. But among them, residential property investment fell by more than half to only AU$12.5 bln in the 2017/18 year.

The UST 10yr yield is holding at 2.66%. And their 2-10 curve is at +15 bps. The Australian Govt. 10yr yield is little-changed at 2.14%. The China Govt. 10yr yield is up +3 bps at 3.12%, while the New Zealand Govt. 10yr yield will open today at 2.24% and up +1 bp.

Gold is up another +US$4 at US$1,325/oz.

US oil prices are up marginally to just under US$56/bbl while the Brent benchmark is holding just under US$66.50/bbl.

The Kiwi dollar has pulled back slightly to 68.4 USc. On the cross rates we are also holding higher at 96 AUc, and off just a little at 60.5 euro cents. That settles the TWI-5 at 73.

Bitcoin is sharply higher at US$3,860 which is a +7.8% gain on the day. The American NASDAQ is adding some crypto indexes to its exchange. 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 ».

Daily exchange rates

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End of day UTC
Source: CoinDesk

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Highlight new comments in the last hr(s).

Even Germany is looking nervous!
German regulators have stepped in to stop short-sellers betting against payments giant Wirecard, warning that it posed “a serious threat to financial stability”. (They) took the unusual step of banning short-selling against the company for two months after its shares plunged on a string of reports relating to fraud and accounting irregularities."

The watchdog said that “short attacks” by hedge funds had been... threatening investor confidence and Frankfurt’s “market integrity”.

China is using bounty hunters to claw back money inside Australia | Four Corners


Morning David Chaston. Might want to delete the errant data point out of the bitcoin chart dataset.


Economist Michael Reddell is appalled at the National Party's subservience to Communist China. He explains why


If only more people took notice of what Reddell has been saying for years.
Instead, like he argues in that article, everyone just prefers to be willfully ignorant.


He might be right and he might be wrong but at least he is willing to take the side of human values. The UK Labour party has 7 MPs resigning over values. The Greens had MPs resign about benefit fraud policy. The National party has failed too even get its own MP Jian Yang to comment about anything contraversial in China: organ harvesting of Falun Gong members, a million Uyghurs forcibly 're-educated', repression in Tibet, threats to Taiwan, rejection of international arbitration in the South China sea.
Jian Yang MP was a Chinese spy in China; what evidence suggests he is not a spy in NZ? Who knows maybe Julie Anne Genter MP is a US spy but if so at least she doesn't grovel support for Pres Trump.


All very true.

At least JAG didn't lie on her application for citizenship, though.
It's crazy that we just seem to not care that an MP fraudulently completed what should be an almost sacred document to all citizens. To me, that is utterly crazy.

If you have no respect for that document, you have no respect for the country. It's as simple as that.

Morning Aj

Mr Reddell has written a very good article there. Thanks for sharing.



Great article and right on the money.

National has abandoned any care for this country and its inhabitants.

We are kiwis and always punch above our weight, our politicians need to show some spine and start acting like we expect them to.

National is looking for candidates for the next election. If you are a sycophant we are the party for you.
You could be your local Mp and make a difference.


pigeons coming home. Seems it's a global momentum

As a Pommie immigrant it is a rare occasion I can say Britain is better than NZ. This is one. Why isn't NZ doing this? Why are all bottles returnable in parts of Australia and Canada? Why isn't NZ taking the lead instead of messing around with supermarket bags.

Rabobank: China's Borrowing Was Insane: In January It Borrowed 5% Of GDP In One Month
if the January pace is kept up China is already throwing the whole kitchen at the economy. It borrowed FIVE PERCENT OF GDP IN ONE MONTH. That’s 60% of GDP in a year. That’s a peak-WW2 level of borrowing. Does it suggest a real trade deal is coming? Or that China is backing away from its state-led model? Try to understand that. (And be very nervous on CNY.)



Guessing you saw this already but it's a good accompaniment to the above. They really are throwing the kitchen sink at it.


Another great article!

China is a Ponzi ! that is a scary thought.....


Here's a scarier thought, we have no idea how much of that private debt is sitting in our housing market.

Wow, another great article!!


Not sure how much of the above is related to this .


'One of the reasons I think we want to watch credit is because money has changed. It has morphed. Call it evolution – I think it is devolution – but money has become debt. Debt is money. Richard Duncan is a guest of ours, makes people mad because people don’t like to hear what he has to say, but he said, “Look guys, learn the fact that money isn’t what you thought it was.
Kevin:Sort of the new printing press.

David:Yes. So if you think about the last five quarters, this is just over a year’s timeframe, what is credit? It is just a debt obligation with an interest component attached to it. Somebody owes somebody else money. Credit has grown by 30 trillion dollars.

Kevin:Oh my, say that again. 30 trillion dollars. That’s one-and-a-half times our entire U.S. debt for the last 240 years.

David:That’s in a matter of five quarters.

Kevin:That’s in five quarters that credit has grown 30 trillion dollars.


More and more it seems a head fake, one centered, I believe, on China and RMB. The eurodollar world stumbled out of Euro$ #3 and never really regained much momentum. That meant the Chinese system would not recuperate much of its lost monetary base – “dollars” in the form of foreign reserves.

There was a conscious decision at the outset of 2016 whereby the PBOC would fill in the gap by printing RMB through its own discretionary balance sheet activities. Forex assets might still fall, and they did, but Chinese money wouldn’t as the balance tipped more toward “unbacked” RMB.

Is The "World's Biggest Widowmaker" Trade Finally Dead? JGB Buyers Stage Revolt

Something is wrong with the bitcoin chart - looks flat as a pancake. Conspiracy I say!

Buy Bitcoin now it will be up to $5642 by November.

looks like it might break $4,000 today even.

Could be time to chuck in a couple of thousand.

I already did - back at 3,300.

Really! I though you bought at the "bottom" which was $3700 then, looks like you have been lucky this time and made your money back