Here's our summary of key events overnight that affect New Zealand, with news of a new and somewhat surprising record on Wall Street.
The S&P 500 has jumped +0.9% today and is now above its all-time closing high in afternoon trading. Upbeat profit reports have pushed major Wall Street indexes higher across the board. Remember it was just seven months ago this market was undergoing a severe downturn, slicing -20% off the S&P500 index, so to be back at a record high so quickly is one of the fastest round trips in market history.
In the US, new home sales came in better than expected in March. A sharp drop from February was expected (-2.7%) but in the end a good rise was posted (+4.5%). But this was still below the very good gains recorded for February (+5.9%). And for the first time in a while, this latest March data was above the same month a year ago. Recall, existing home sales levels were quite weak in March and these represent about ten times the level of new home sales.
Meanwhile, the latest update of their House Price Index revealed only a very modest change for February, but standing +4.9% above the same month a year ago. Regional variances are large.
The next regional Fed review of manufacturing activity has brought a restrained view, with new order and shipment levels slipping. It is a story being repeated in most Fed districts.
The US economy may be delivering record earnings for the major listed companies, but on-the-ground economic activity seems fairly lackluster.
And speaking of lackluster, in China, one of their largest ride-sharing companies said its current business model is unsustainable and "can't last long" amid continuing losses. The failure of a big ride-sharing company somewhere in the world seems closer these days.
China's tax cut program is underway, delivering NZ$75 bln in cuts in the first quarter of 2019. This is another plank in their stimulus support of economic activity. The overall tax cut will ramp up to NZ$450 bln over all of 2019 so there is a lot to come yet.
The April survey of EU consumer sentiment is still negative, but this result largely reversed the improvements we have reported in the first three months of the year.
The UST 10yr yield has drifted down by -2 bps overnight and is now at 2.57%. Their 2-10 curve is firmer at +21 bps but their negative 1-5 curve is little-changed at -8 bps. The Aussie Govt 10yr is at 1.90% and down -5 bps, the China Govt 10yr is up +1 bp to 3.43%, while the NZ Govt 10 yr is down -2 bps to 1.98%.
Gold is marginally softer, down -US$2, and now at US$1,272.
US oil prices are firmer again today, now just over US$66.50/bbl while the Brent benchmark is just over US$74.50/bbl. That is a 16 month high. But it is worth noting that the Chinese refuse to accept the US sanctions on Iran. This could complicate their trade talks. India also seems unlikely to respect these sanctions.
The Kiwi dollar is unchanged at 66.8 USc. On the cross rates we are at 93.7 AUc. Against the euro we are at 59.3 euro cents. That puts the TWI-5 at 71.2.
Bitcoin is at US$5,582 and another good gain, this time of +4% 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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