Here's our summary of key events overnight that affect New Zealand, with news trade expectations are still dominating market sentiment.
Update: However, in the US the release of the US Fed minutes shows a central bank happy with where it sits domestically, but wary of international risks, and wary of the impact the rising US Federal budget deficit is having. The "unusually flat yeild curve" gets special mention. They say they will be 'patient' and will maintain their "balance sheet" moves that drain its reservoir of stimulus funding. And all this means any rate hike in 2019 from them is now less likely.
Across the Atlantic, markets are coming to believe that the ECB may be on the brink of restarting its QE (money printing) program to bolster a weakening European economy.
And in the UK, more parliamentarians have quit to sit on the cross benches, this time including a small group from the ruling Conservative Party, taking the total defectors to 11 so far. This new splinter bolsters the chance of the UK remaining in the EU in some form after March. But the situation is still a mess. The EU has said it won't revise the core divorce situation, but it might add some parallel side agreements.
And Swiss company Glencore, a famously aggressive miner and commodities trader has been convinced to stop new investment in coal. Glencore has a major presence in Australia. Apparently 'ethical investor' pressure has brought about what is a stunning about-face.
The US-China trade talks are on-going and the US, which has long criticised China for manipulating its exchange rate, now insists the Chinese manipulate it to be stable with the US dollar. And as the March 1 tariff deadline approaches, the US President has suggested that he will back away from imposing them. Meanwhile, China-to-US trade is booming with US West Coast import ports running at full capacity as goods flow in. China is certainly taking advantage (or is that American importers) while the US policy positions remain unresolved.
In Japan, their trade deficit in January rose sharply as exports fell more than -8% on lower demand from China. This is their biggest monthly deficit in more than five years.
In Australia, Q4-2018 data out yesterday for wage growth shows it rising a subdued +2.3% in the year, but it was still the largest annual increase in four years. (New Zealand weekly earnings growth was recorded at +5.1% in the year to December while average hourly wage rates rose +3.1%.)
The UST 10yr yield is little-changed at 2.64%. But their 2-10 curve has firmed to +16 bps. The Aussie Govt 10yr is down another -2 bp at 2.10%, the China Govt 10yr is up +2 bps at 3.15%, while the NZ Govt 10 yr is unchanged at 2.26%.
Gold is up again today by another +US$6 to US$1,345/oz. That puts the cumulative gain at +US$34 since the weekend, or +2.6%.
US oil prices are also higher, now just on US$57.50/bbl while the Brent benchmark is up to just over US$67/bbl.
The Kiwi dollar is hovering at 68.8 USc. On the cross rates we are marginally lower at 95.8 AUc, and similar at 60.5 euro cents. That puts the TWI-5 softer at 73.1.
Bitcoin is unchanged at US$3,927. 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 ».
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