US job market slowing; US new home sales drop; US-Sino trade talks uncertain; Chinese industrial production up; retail sales grow in China; EU industrial output up; OPEC slows cuts; US weakens; UST 10yr 2.61%; oil & gold up; NZ$1 = 68.5 USc; TWI-

Here's our summary of key events overnight that affect New Zealand, with news the US job market is slowing.

Figures from the US Department of Labour show the number of Americans filing applications for unemployment benefits increasing to 229,000 in the week ending March 9, an increase of 6,000 from the previous week's unrevised level of 223,000.

While new home sales in the US fell more than expected in January. They were expected to hold at December levels, but actually came in almost -7% lower. It is also almost -4% lower than the same month a year ago.

And professional analysts are lowering their growth forecasts for the US for Q1-2019. One new survey has it down to just +1.3% pa, and a drop from a tame +2% that last time this group was surveyed. The Atlanta Fed's GDPNow estimate is at +1.5%.

President Donald Trump says the United States is doing very well in trade talks with China, but he can’t say whether a final deal will be reached. Trump decided last month not to increase tariffs on Chinese goods at the beginning of March, but resolving the trade dispute remains uncertain. 

While in China industrial production rose by +5.3% in January and February of 2019, below analysts' expectations of a +5.6% growth rate, and well below the +7.2% rate recorded in the same period last year.

China's retail sales rose more than +8% in the same period, and property investment was up more than +11% and an unexpected surge.

While in the EU a 1.4 percent jump in industrial output has improved sentiments, the biggest gain since August 2017 and there are signs of a rebound in some of the bloc’s largest economies, including France, Italy and Spain. Growth in energy and non-durable consumer goods production were particularly strong, but they’re still down.

Meanwhile, OPEC has continued to slow the pace of its oil production cuts in February, which were below market expectations. It said its crude output had fallen by 221,000 barrels a day in February to an average of 30.55 million barrels a day. This compares with a decline of 797,000 barrels a day in January.

Overnight stocks in the US were mixed with the S&P 500 experiencing small gains and losses. In Europe stocks were up 0.8% on the back of news the UK government had voted against a no-deal Brexit. While in Asia they were unchanged after mixed data from China and the lack of real progress in the ongoing US-Sino trade talks.

The UST 10yr yield has moved back up to 2.63%. Their 2-10 curve remains at +17 bps while their negative 1-5 curve is at -9 bps. The Aussie Govt 10yr is up 1 bp to 1.97%, the China Govt 10yr is unchanged at 3.16%, while the NZ Govt 10 yr is also +1 bp to 2.08%.

Gold lost all yesterday's gains and is back down to US$1,295 and a -US$13 drop since this time yesterday.

And US oil prices are little-changed at US$58.50/bbl while the Brent benchmark is just over US$67.50/bbl.

The Kiwi dollar is softer this morning at 68.2 USc. On the cross rates we have also drifted slightly lower at 96.6 AUc. Against the euro we are at 60.3 euro cents. That puts the TWI-5 at 72.9.

Bitcoin is virtually unchanged at US$3,849. 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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End of day UTC
Source: CoinDesk

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Go the youngsters today. It's only one aspect of the ?*%#^ sandwich they're being handed - hate to thing how angry they'd be if they realised the full extent.......

you can't borrow off the future forever.

Sweden should be more worried about the more immediate threats like the "youths" entering their country and turning it into a third world rape hole.

my book for the week

'the world of yesterday' Stefan Zweig

That looks fascinating. Have you finished it yet?

not yet.

Andrew, a few weeks ago you recommended a book on JFK and the Veitnam war (I think) can you put up it's title again please?

that would be, JFK and the unspeakable, why he died and why it matters

six months ago aussies were warned to get out of the property market and like many here, believe house prices only go up
1.7 trillion of mortgage loans in aussie.
so much in common with NZ, an economy built on housing debt, banks tightening credit, house prices falling


He makes some good points, but still overly bullish IMO

Ir seemed to be a combination of unsubstantiated reckons with a touch of "it'll never happen here," all while ignoring that actual figures coming out of Auckland. Why is it so difficult for people to admit that the main driver of the stratospheric house prices was Chinese hot money closely followed by speculators? Now that tap has been turned off, we're now seeing the reversion to the mean.

Chinese money has been a driver of the Auckland market since 1988. The AK housing market dropped almost 20% after the share market crash (where we were) & then in came the first wave of Chinese money which has flowed pretty consistently up until recently. They've now had 30 years to get their wealth out of Asia & it's a similar story in most of the top English speaking cities around the Pacific. Mr Xi has done his best to stop it but with triple-the-price invoicing via the Hong Kong banking system it's still happening.

Markets aren’t really recovering from the US-China trade war – this is just a dead cat bounce

Re the US jobs report, here's David P Goldman's take on it over at Asia Times. Essentially, in an income-constrained market, one can have higher wages but at the expense of growth, because SME's cannot hike prices. Back here in Godzone, looking down the barrel of yet another wage-share-growth-by-Gubmint-fiat hike, one has to wonder if the same trajectory will be could just conceivably impact tax revenues as well.

The Bank of Japan's Never-Ending Crisis Is a Lessons to the World's Central Banks.