Here's our summary of key events overnight that affect New Zealand, with news the Chinese are moving to 'remind' Australia who is boss.
But first, in the US:China trade talks, there are some suggestions that an outline of a deal is taking shape. China's carrot is soybean purchases and Trump is interested. But most of this is just rumour so far.
A widely-watched measure of how much businesses are investing fell for the fourth time in five months at the end of 2018, signaling firms are feeling less confident in light of domestic and global economic uncertainty. Overall orders for durable goods, rose a seasonally adjusted 1.2% in December from the prior month, and that was far less than the +1.7% markets were expecting.
The first look at US business activity in February is positive. Private sector output growth is regaining momentum this month, with a good upturn in service sector activity more than offsetting a slowdown reported by manufacturing firms.
US house sales (excluding new-build ones) fell -1.2% in January from the prior month. Sales volumes were -8.5% lower than the same month a year ago. Median prices are -2.4% lower than for December although +2.8% higher than a year ago. The American housing market is in the doldrums even though mortgage interest rates are lower.
All this data has Wall Street slightly lower today.
In China, customs officials at China’s northern port of Dalian have banned imports of Australian coal and will cap overall coal imports from all sources to the end of 2019 at 12 mln tonnes, an official at Dalian Port Group told Reuters. This could be a major blow for Australia and the Aussie dollar fell sharply on the news, taking the Kiwi dollar down with it. Beijing has denied the report, but it fits with a pattern of actions aimed at getting Australia (and New Zealand) to be more subservient to China's way of thinking.
The flash February PMI for Europe is stagnant. Although output across the eurozone is increasing at a slightly faster pace, the rate of expansion remained timid. The manufacturing sector is dragging on overall economic performance, falling into contraction this month.
In Japan the factory outlook is not looking good. Their manufacturing PMI fell to 32-month low of 48.5 in February (from 50.3 in Jan) mainly on the back of sharper falls in production and new orders. And future output expectations turn negative for the first time since November 2012.
In Australia, the ALP has now seemed to joining the Government in flagging that no action will be taken on changing the compensation model for brokers. The clear conflict-of-interest situation is deemed less of an issue than "the importance of brokers for competition".
The UST 10yr yield is up +5 bps at 2.69%. Their 2-10 curve has held at +16 bps. The Aussie Govt 10yr is unchanged at 2.10%, the China Govt 10yr is down -1 bp at 3.14%, while the NZ Govt 10 yr is down -4 bps to 2.22%.
Gold is sharply lower today by -US$16 to US$1,329/oz.
US oil prices are about -US$1 lower today, now just over US$56.50/bbl while the Brent benchmark is down to just over US$66.50/bbl. American government data showed a fifth weekly build in crude inventories and record local production. Meanwhile concerns about slowing global economic growth weighed on the demand side.
The greenback has risen overnight, pushing the Kiwi dollar lower by -¾c to 68 USc. On the cross rates we are gaining on the Aussie and now at 96.2 AUc and you have to go back to September 2016 to find a higher level. Against the euro we are lower at 60 euro cents. That puts the TWI-5 down to 72.6.
Bitcoin is also softer at US$3.889, a -1% fall on the day. 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 ».