Here's our summary of key events overnight that affect New Zealand, with news international markets are quiet this Tuesday, in something of a holding pattern ahead of some important data releases later in the week.
On equity markets, Wall Street is marking time today, European markets moved little overnight although if there is any trend it is lower, and yesterday Asian markets gave up their early enthusiasm to close flat.
The latest update monitoring world trade levels shows that momentum is now negative, even if there was an uptick in January.
The only market showing any life is the crude oil market where the price is now at a five month high.
China is reportedly wrestling with the question of whether to seek to join the TPP trade group. But to do so, they would need to commit to some tough and major reforms first. However the mere fact they are weighing their options is something pretty significant. It is something the Americans will be nervous about given their somewhat irrational pullout.
China's foreign exchange reserves rose more than expected to just under US$3.1 tln in March and that is the fifth straight month of increase.
And it is increasing its gold holdings as well, adding more than 11 tonnes in March, taking its total holdings to 1,885 tonnes. That is now four straight months of net buying.
As India nears voting in its national elections, both major political forces are promising to spend up big on development investment with the goal of eliminating poverty. Backing up the goal is a broad consensus that massive spending will be required in infrastructure, as much as US$1.5 tin. A project like this, even if it is over many years, will have global implications, similar to the investment development drive that China undertook.
In France, it seems tax cuts are on the way for many people, in part as a result of the Yellow Vest protests. France is a high-tax, high-social-spending (income transfers) country with taxes equivalent to 46% of GDP. (In New Zealand, that ratio is 34%.).
In Australia, Chinese investment dropped by more than -35% in 2018, to its second lowest level since the global financial crisis of 2008. An updated report from KPMG and the University of Sydney Business School found that Chinese firms invested a total of just over AU$8 bln in Australia last year (just 0.5% of GDP), down from AU$13 bln the year before (0.9% of GDP). That was despite overall Chinese outbound investment increasing globally by +4.2% last year.
The UST 10yr yield is firm at 2.52% and that is +2 bps higher than this time yesterday. Their 2-10 curve is at +16 bps and their negative 1-5 curve is wider at -11 bps. The Aussie Govt 10yr is little-changed at 1.89%, the China Govt 10yr is up +2 bps to 3.29%, while the NZ Govt 10 yr is at 2.00%, and that is down -3 bps since this time yesterday.
Gold is up +US$6 at US$1,297/oz.
US oil prices are sharply higher today rising more than +US$1 overnight, now just under US$64.50/bbl while the Brent benchmark is at US$71/bbl.
The Kiwi dollar is a little firmer this morning at 67.5 USc. On the cross rates we are marginally softer at 94.6 AUc. Against the euro we are still at 59.9 euro cents. That leaves the TWI-5 at 72.1.
Bitcoin is firmer at US$5,223 and a +1.7% 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 ».