Here's our summary of key events overnight that affect New Zealand, with news world equity markets may be up, but bond markets are taking a starkly differing view.
First, US durable goods orders rose more than expected in January, but the bar was low. They rose far less than the December gains, but the rise from January a year ago was healthy (although that January 2018 result was unusually weak).
American construction spending in January was flat on a year-on-year basis, even if it did beat estimates.
In Japan, core machinery orders fell more than -7% in January as companies pull back from investing over growing uncertainty about where the Chinese economy may be heading. Export orders fell -18%. That makes it the third straight month of declining orders for Japan's capital equipment manufacturers.
Global equity markets are stronger today. The S&P500 is up more than +1% in afternoon trade in New York. That follows gains in Europe overnight of about +0.5%. But Asia yesterday suffered big falls, exceeding -1% in most major markets.
In Australia, the RBA has made a 'landmark change by labeling climate change a 'systemic risk' to the Australian economy. The implications are unclear at this stage.
New Zealand wholesale swap rates tumbled yesterday, down across the board about -4 bps, following even larger falls in Australia of about -7 bps. It seems the Kiwi falls are being driven more as collateral damage from Australia than local data. The resilience of Aussie consumer confidence is being questioned as house prices and housing construction falters, and bank lending follows it down.
The UST 10yr yield are staying low and now at 2.61%. Their 2-10 curve remains at +16 bps while their negative 1-5 curve is at -10 bps. The Aussie Govt 10yr is down -4 bps to 1.97%, the China Govt 10yr is unchanged at 3.16%, while the NZ Govt 10 yr is down -5 bps to 2.07%.
Gold is stronger, up to US$1,308 and an +US$11 rise since this time yesterday.
And US oil prices have jumped more than +US$1 to US$58/bbl while the Brent benchmark is just over US$67.50/bbl. An unexpectedly large fall in American crude oil stocks is behind the jump.
The Kiwi dollar is at 68.5 USc and marginally softer from this time yesterday. On the cross rates we have also drifted slightly lower against the Aussie and now at 96.7 AUc. Against the euro we are off a little bit at 60.6 euro cents. That puts the TWI-5 at 73.1.
Bitcoin is little-changed at US$3,844. A BIS review of cryptos has had no impact on prices. 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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