Here’s my summary of the key events overnight that affect New Zealand, with news of major market volatility.
Global markets are bouncing around, as China’s central bank has cut interest rates after another dive in Chinese markets.
The People’s Bank of China has cut its benchmark bank lending and deposit rates by 25 basis points. It’s also reduced bank reserve requirements by 50 basis points, essentially pumping about US$106 billion into the Chinese economy.
The Shanghai Composite closed trading on Tuesday, down 7.6%, reaching its lowest level since December. The Shanghai market has fallen 22% over the past four trading sessions, marking its fastest retreat since daily price move limits were introduced in 1996.
Japan’s Nikkei has also fallen nearly 4%.
US markets have just closed lower, after a failed attempt at a rebound after the Dow’s worst three-day point drop in history.
The Dow Jones industrial average and the S&P 500 closed lower after rallying about 3% earlier in the trading day – their biggest reversal to the downside since October 2008.
European stocks rebounded Tuesday, as bargain hunters emerged a day after the market suffered its worst selloff in nearly seven years, with Germany’s benchmark even turning positive for the week.
The US oil price has gained a dollar today, but is still rock bottom at US$39 a barrel. Brent crude is at US$43 a barrel.
Gold has dropped US$14, to US$1,139/oz.
In New York, the UST 10yr yield benchmark has recovered 9bp, to 2.10%.
The New Zealand dollar starts today even lower against the US, compared to this time yesterday, at 65.0 US¢. It remains at 90.7 AU¢, and has picked up a bit to 56.9 euro cents. The TWI-5 has fallen to 68.7 – its lowest point since December 2011.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »