Here’s my summary of the key events overnight that affect New Zealand, with news our tourism industry is facing a huge increase in demand.
But first, a slew of factory reports were out internationally overnight and they showed that the cooling global economy is having an impact on the factory floor. One report showed the rate of expansion in US factories slowing, another showed it holding its own after a fall the previous month. It’s immediate prospects look quite good after car companies reported a banner month there.
The euro zone factory report also kept up its the healthy growth, as did India, while China‘s factories contracted sharply. Japan is still expanding. Even though many of the developed countries are still expanding, most of the the factories in the emerging economies are not and that is the reason the global outlook is quite dim. In fact the WTO cites China’s factory sector as the main threat to growth in world trade.
Soft demand for minerals hurts Australia a lot. But they have just said that the market is now at its bottom and will rise from here. All their bets are on China’s factories rebounding.
In a Report out yesterday, it is clear that our tourism industry is in for a sharp period of expansion, especially from China. More than 100 mln Chinese took an international trip last year, up +11%. And “Oceania’ was the destination for more than 10% of them. The eye-popping detail shows that only the south-west of China has the travel bug so far; when that spreads the numbers will grow very fast. We will need big growth in accommodation facilities and other tourist infrastructure to handle this trade. Tourism is set to be our biggest export earner for some time to come.
China is on a week-long public holiday, and don’t forget it is a public holiday in Australia on Monday, their Labour Day.
In New York, the UST 10yr yield benchmark is falling again today and is at 2.03%.
The US benchmark oil price is basically unchanged, now just under US$45/barrel, Brent and just under US$48/barrel. Despite falling rig counts in the US oil production keeps holding up to many people’s surprise. And the Mexican’s have successfully auctioned off three new potentially large production areas. High production and low prices will be here for the plannable future, it seems.
The gold price is unchanged at US$1,115/oz.
The New Zealand dollar strengthened overnight although it is retracing some of that gain now. It is at 64 US¢, at 91.1 AU¢, and 57.2 euro cents, pretty much where it was at this time yesterday. The TWI-5 is at 68.8.
If you want to catch up with all the local changes on Friday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »