US factory output falling, consumer sentiment up; Canada factory output up, house sales slump; China FDI rising; Aust. apartment sales tough; UST 10yr 2.59%; oil and gold unchanged; NZ$1 = 68.5 USc; TWI-5 = 73

US factory output falling, consumer sentiment up; Canada factory output up, house sales slump; China FDI rising; Aust. apartment sales tough; UST 10yr 2.59%; oil and gold unchanged; NZ$1 = 68.5 USc; TWI-5 = 73

Here's our summary of key events over the weekend that affect New Zealand, with news other than the war against peace by the extreme culture warriors that has been brought to New Zealand.

In the US, factory output fell for the second consecutive month in February, a growing sign that a long-predicted slowdown is weighing on their economy. For consumer goods output it is three consecutive months of decline; for business goods the February decline was especially steep. Year-on-year however, it is up +3.5% overall. Accompanying this national result was a key regional result that isn't positive either.

But consumers haven't caught up with the declining factory mood yet. It is hard to know which measure is indicating the likely future trend.

Updated US Treasury data for January shows that foreigners are continuing their sell-down of US investments.

In Canada, factory output rose in January and by more than expected, following a sharp decline the month before and a string of previous falls.

But home sales in February in Canada were down sharply and down by much more than analysts were expecting.

In China, they reported that foreign direct investment in the country rose +3.3% in the year to February, up from +2.8% reported in January.

They also reported that house prices were broadly stable in February.

In Japan, their central bank has turned decidedly gloomy as they downgraded their immediate economic prospects, but warned others of the risks of undue pessimism. They took no new action however.

In Australia, there is new analysis that show that nearly half of all apartments sold in Sydney and Melbourne in February were sold at prices lower than what the seller originally paid. The push into intensive housing seems to pose special risks of volatility for those who buy this type of dwelling.

The UST 10yr yield has fallen further even if minor and is now at 2.59% - actually its lowest level in 15 months. Their 2-10 curve is narrower at +15 bps while their negative 1-5 curve has widened sharply to -12 bps. The Aussie Govt 10yr is down to 1.98%, the China Govt 10yr is unchanged at 3.16%, while the NZ Govt 10 yr is also unchanged at 2.10%.

Gold has risen, up to US$1,302, and back to about where it was at the start of the week.

US oil prices are little-changed, now just over US$58.50/bbl while the Brent benchmark is just over US$67/bbl.

The Kiwi dollar is at 68.5 USc and little-changed over the weekend. On the cross rates we are marginally weaker at 96.6 AUc. Against the euro we are at 60.4 euro cents. That puts the TWI-5 at 73.

Bitcoin is also a little firmer at US$3,968. 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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11 Comments

“In Australia, there is new analysis that show that nearly half of all apartments sold in Sydney and Melbourne in February were sold at prices lower than what the seller originally paid.”
Whoops. After living in Melbourne for years I know a lot of apartments were foreign owned. I would be interested to know if it’s mostly foreign buyers taking a bath or if it’s the locals?

Is it really a loss for a foreign buyer if they're laundering funds via Australian Real Estate?

True, although I had in mind the impact on the AU economy more so.

If money laundering than it does not matter.much to them and also if speculators would have been speculating in last number of years by flipping properties many time so taking a hit in the last deal should be fine as long as they made money over all.

Have seen so many houses / listing that are in market in Auckland in prime area and when you check their history - last purchased, wonder how they will be able to sell as many have been bought at ridiculously high price (at that time everything was justified) but now..........

When living in NZ I sold my old house in the UK it was exchange rate that mattered more than profit or loss on sale. Which Asian currencies have fallen compared to Aussie dollar?

...as at 2016, 33,000 Auckland homes were classified as vacant. Are foreigners ready to take a bath here too?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=116...

It's an old article sure but I'd be surprised if the situation has greatly changed.

Meanwhile for investors looking past today, a warning on "peak investment" for the fossil fuel industry.

https://www.youtube.com/watch?time_continue=202&v=Yj3MSgqxJTg

http://kunstler.com/clusterfuck-nation/the-blind-leading-the-deaf-and-dumb/

"Hysterias don’t last forever, but the economic depression ahead will last a long, long time, and the nation will have to find some way to adjust to a lower standard of living. None of the nostrums currently in the air — the guaranteed basic income, Medicare for all, the Green New Deal — will avail to alter that fate. The big question is just how disorderly and violent the journey through that will have to be".

I unreservedly apologise for my comments on Friday to the Man. I jumped to conclusions which were premature and wrong, at least partly because I heard a terrorism expert say the shooter had been in NZ for a long time, and was very likely working within a local cell. That may still be the case or it may not. But it was totally unfair of me to jump to conclusions about it having a strong ChCh basis.

Thanks Fritz.

Fritz, I accept your apology, and to be fair I was going to ask you for one lol.
Thing is that I don’t really care where the perpetrator came from as I What he did was a despicable act whether he was from ChCh or Iraq!
You are wrong about ChCh having a bad white extremist problem in a Bach compared to anywhere else!
That Paul Buchanan needs to apologise profusely as he is the one that started it!
Auckland is every bit as bad as Chaco if not worse than ChCh and it was reported at the weekend!
Yes there are rascist in every city in the world unfortunately, and it clearly wirks both ways!
The perpetrator was originally going to do his bad deed at the Dunedin mosque and really had no connection to ChCh.