Here's our summary of key events overnight that affect New Zealand, with news investors are clinging to one Chinese factory stat to upgrade their risk-on mood.
Global equities are stronger today, building on gains from their best quarter since 2010, as investors cheered upbeat factory activity data in China, and signs of progress on the US-China trade front. The S&P500 is up +1% so far today. Shanghai was up an impressive +2.6% yesterday. Japan (+0.8%) and Europe (+1.0%) did well too.
American economic data released overnight however was ho-hum. US retail sales actually shrank in February from January, although they are +2.4% higher on a year-on-year basis
The two factory PMI releases for March were not inspiring either. The ISM one posted a minor rise, the final Markit one was downgraded.
US construction spending data for February was also ordinary, up +1.1% from the same month last year.
And American business inventories keep on rising, which is not a good sign. (Check out the inventory-to-sales ratio in the link.)
We were sceptical this time yesterday when we reported the official China factory PMI which showed a jump back into expansion territory. Yesterday afternoon, the private Caixin/Markt PMI was also reported and that also showed a good return to a modest expansion. It seems the recovery in factory fortunes in China is for real. Markets around the world noticed. But one Chinese company not getting any investor love is Beingmate.
And the Xi-Ardern meeting is being reported internationally as a part of China's attempts to pry New Zealand away from its close relationship with the US.
The EU said its inflation rate is falling, now down to +1.4% pa, although this is the same rate it was a year ago. They also said their jobless rate at 7.8% is the lowest it has been since 2008.
In Australia, their home builders report unusually low sales in February. And CoreLogic is reporting that Aussie main centre house prices are down the most since their 1990s recession. Property prices in Sydney have now fallen almost -14% since they peaked while Melbourne is down almost -11%.
Meanwhile, business conditions have improved across The Ditch, bucking a six-month downward trend.
The UST 10yr yield is up strongly, by +8 bps this morning to 2.49%. Their 2-10 curve is wider at +17 bps and their negative 1-5 curve is narrower at -10 bps. The Aussie Govt 10yr is sharply higher at 1.86%, up +7 bps, the China Govt 10yr is also higher, up +5 bps to 3.13%, while the NZ Govt 10 yr is at 1.86%, up another +3 bps since this time yesterday. Yesterday local swap rates firmed, especially at the long end.
Gold has dipped another -US$2 overnight to US$1,290.
US oil prices are firm again and up +US$1.50 to start the week, now just on US$61.50/bbl while the Brent benchmark is at US$69/bbl. OPEC oil output has hit a four year low on Saudi cuts and the collapse in Venezuela.
The Kiwi dollar is holding this morning at 68.1 USc. On the cross rates we are marginally lower up to 95.7 AUc. Against the euro we are at 60.7 euro cents. That leaves the TWI-5 at 72.8.
Bitcoin is also a firmer at US$4,137 and another +1% gain overnight. 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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