G20 leaders shift focus from monetary to fiscal stimulus, Fed to sit tight, Germany resilient in wake of Brexit, independent Chinese media silenced, Deutsche Bank under fire; UST 10yr yield at 1.56%; oil and gold lower; NZ$1 = 69.9 US¢, TWI-5 = 74.0

Here’s my summary of the key events overnight that affect New Zealand, with news global markets are pretty stable ahead of the Federal Reserve and Bank of Japan meeting this week, and the Reserve Bank of New Zealand and Bank of England meeting next week. 

Turning to the US, ANZ economists say its domestic case for a rate hike is robust, but the reality is the Fed will be on hold for the foreseeable future. They say “Fedspeak” has been notable for its absence, and we would be seeing a bit more prep by now had the bank been ready to pep things up. With other major central banks expected to err on the side of easier policy, the US dollar also still looks attractive.

G20 leaders are turning their heads from monetary to fiscal stimulus to energise the global economy. Speaking at a summit in China, the head of the OECD said countries should make the most of cheap lending costs to invest more. China, Japan and the UK have already starting easing their fiscal stances or hinted at plans to do so. 

Business sentiment in Germany is better than expected. Its IFO business climate index declined less than expected in July, coming off a seven-month high in June. Europe’s largest economy is proving resilient in the immediate aftermath of the Brexit.

The Chinese Government has upped its efforts to silence freedom of speech. It’s banned several online news portals, including Sina Corp and Tencent Holdings, from reporting original news. It’s ordered companies to simply dismantle their “current affairs news” operations, saying they can only publish reports provided by government-controlled media.

Deutsche Bank is facing court action further to the GFC. A US district judge has ruled the bank must face part of a lawsuit for claims it defrauded investors who bought $5.4 billion of preferred securities by concealing its exposure to the fast-deteriorating subprime mortgage market in 2007 and 2008.

The UST 10-yr yield is at 1.56%.

The US benchmark oil price has dropped again to US$43/barrel while the Brent benchmark is at US$45/barrel. US production has increased for the fourth week in a row, as has the US’s rig count. 

The gold price has dropped to US$1,318/oz.

The NZ dollar is continuing to hover just below 70 US¢. It’s inched back since this time yesterday to 93.6 AU¢ and 63.6 euro cents. The TWI-5 index is at 74.0.

If you want to catch up with all the local changes from yesterday, we have an update here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Daily exchange rates

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var chart_title_arr= ["US dollar","Australian dollar","Trade weighted index","Japanese Yen","Chinese Yuan","Euro","British pound"];
var chart_subtitles_arr= ["Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate"];
var tab_titles_arr= ["US$","AU$","TWI","u00a5en","u00a5uan","u20acuro","GBP"];
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// to generate the format for date representation in x axis

var timestamweek = 604800000;
var timestamday = 86400000;
var timestammonth30 = 2592000000;
var timestammonth31 = 2678400000;
var timestamyear = 31536000000;
var timestamquarterly = 7776000000;

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var yy1=fomat.substring(k2+1,k3+1);

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mm= "02";
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else if (mm == "Mar")
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mm= "08";
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do {
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do {
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var dd= fomat.substring(0,k1);
var mm = fomat.substring(k1+1,k2);
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mm= “12”;
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var mm2 = time4.getMonth();
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var ahref_title=”Click here for full story”;
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mm= "07";
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mm2 = "Mar";
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for(i=0;i

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