Here’s a special holiday update of some key events and data you may want to know about today.
First up, the two largest American car makers have reported a strong December. General Motors reported an unexpected +10% rise in December, while Ford also beat forecasts. That will probably mean a record 2016 for US new car sales, beating the previous best set in 2015.
The US Fed released the minutes of their December rate increase meeting today. They now see the possibility that they will have to raise interest rates faster than the “gradual” pace that they have stressed for some time. The era of a predictable and boring American central bank may be over.
Adding to that sentiment, big US banks are set on getting Congress to loosen or eliminate the Volcker rule against using depositors’ funds for speculative bets on the bank’s own account, a test case of whether Wall Street can flex its muscle in Washington again. They are going to be aided by the appointment of a Goldman Sachs lawyer to head the SEC. Reuters is reporting that half a dozen industry lobbyists said they began meeting with legislative staff after the American election in November to discuss matters including a rollback of Volcker, part of the Dodd-Frank financial reform that Congress enacted after the financial crisis and bank bailouts. Banks now see opportunities to unravel reforms under President-Elect Donald Trump’s administration and the incoming Republican-led Congress, which appear more business-friendly, lobbyists said.
Electric car maker Tesla Motors Inc has started mass production of lithium-ion battery cells at its gigafactory in Nevada, along with Japan’s Panasonic Corp, the company said earlier today.
In India, an early sign that their crackdown on tax evaders is helping to swell Government coffers comes as they have lowered borrowing plans by NZ$3.8 bln.
In Europe, inflation seem sto be on the move too. The annual inflation rate hit 1.1% last month, according to official statistics agency Eurostat, a sharp jump from November’s rate of 0.6%. The rate is the highest since September 2013, when inflation was also 1.1%.
Spain is in the middle of an impressive recovery. The core measure is unemployment and that is declining quickly. According to data released by the labour ministry earlier today, the number of registered employees rose by 540,655 over the past year, the highest in a decade. The number of unemployed Spaniards, meanwhile, fell by 390,534, the steepest fall on record.
In New York, the UST 10yr yield fell slightly on the release of the Fed minutes, now at 2.44%. However CDS spreads for investment grade corporate debt have fallen to their lowest level in eighteen months. And US LIBOR. the rate banks charge each other to borrow dollars for three months rose above 1% today for the first time since May 2009 as global interest rates extend their climb on expectations of accelerating growth and inflation.
The US benchmark oil price has recovered yesterday’s fall and now just over US$53 a barrel, while the Brent benchmark is just under US$56.50.
The gold price is a tad higher too, now at US$1,165/oz.
The New Zealand dollar is pretty much unchanged and still at 69.6 USc, although it did fall away yesterday but has recovered overnight. On the cross rates it is stable at 95.6 AU¢, and 66.4 euro cents. The TWI-5 is still at 76.2.
The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here »