Here's our summary of key events overnight that affect New Zealand, with news markets seem to be tiring of all the political shenanigans.
Today, politics may be grabbing all the headlines, but the economic drivers are still working away in the background.
The American mechandise trade deficit widened sharply in December to -US$72.6 bln, and on a seasonal basis one of the widest monthly deficits on record. Exports fell -1.3% year-on-year to December while imports rose +3.3% on the same basis. This is another sign that US economic growth slowed in the fourth quarter.
In their housing market, a sign activity is picking up. Pending home sales rose in January from December with a good +4.6% gain. But year-on-year they are down -3.2%.
US mortgage applications also rose and the average interest rate most borrowers are paying for their standard 30yr mortgage is 4.35% which is back to levels that applied a year ago.
Canada inflation came in at +1.4% in January, down sharply from the 2.0% rate reported for December. This wasn't unexpected and is essentially driven by much lower petrol prices (-14.2%).
Across the Atlantic, the latest batch of confidence surveys shows falling economic sentiment. Consumers are staying downbeat while manufacturers turned sharply negative even as the service sector recorded a more positive outlook.
Equity markets are almost all in negative territory. After good gains in Shanghai (+0.4%) and Tokyo (+0.5%) yesterday, European bourses turned lower (-0.5%), and Wall Street is following them down (-0.2%) in mid-day trade today, although the losses are being limited as the session wears on.
In Australia, they had another quarter (to December) where construction work completed came in way below expectations. In fact, this data is now lower in 2018 than in 2017 by -0.5%. The sharp contraction in residential building is expected to be a significant drag on the broader Australian economy.
And staying in Australia, ASIC has revealed it will be using 'big data' to check that mortgage brokers aren't submitting applications that distort income levels, with a new program designed to catch out cheaters. The prescriptive reach of both the regulators and lenders into individual borrower's personal affairs is a direct result of Hayne's Report which forces mortgage industry participants to assume all mortgage applications are flawed. Banks are now directly responsible for verifying the honesty of the application and it is the banker who will be sanctioned if they get it wrong.
The UST 10yr yield is at 2.68% after a rise of +3 bps. Their 2-10 curve is higher at just on +18 bps while their 1-5 curve is still a negative -6 bps, but a little less so today. It has been negative all year. The Aussie Govt 10yr is up +1 bp to 2.11%, the China Govt 10yr is down -2 bps to 3.19%, while the NZ Govt 10 yr is down -1 bp at 2.17%.
Gold is down -US$5 today at US$1,320/oz.
US oil prices are sharply higher at just over US$57/bbl while the Brent benchmark is up to just on US$66.50/bbl. OPEC has confirmed production cuts, in direct defiance of the US President's 'warning'.
The Kiwi dollar is starting today lower by -½c at 68.4 USc. On the cross rates we are unchanged at 95.9 AUc. Against the euro we are at 60.2 euro cents. That puts the TWI-5 down to 72.7.
The bitcoin price is virtually unchanged at US$3,797. 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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