Here’s my summary of the key events overnight that affect New Zealand, with news the stage is almost set for a Fed hike.
Private employers in the US hired more people in November than expected, and wage growth and productivity appeared to pick up in the third quarter, according to two sets of data out today. Neither will dampen expectations that the Fed is on track to raise their benchmark interest rate the week after next. The final data confirmation is expected to come from the weekend release of their non-farm payrolls report for November.
Next week, the RBNZ will review our official rates and markets along with economists are unsure whether a cut will come or not. This comes after the Aussies decided not to cut, and overnight Canada did the same, leaving it at 0.5%.
Tomorrow the ECB will do its own review. A cut (from virtually nothing) in the main rate is not expected, but they are expected to increase the size of their ‘negative rate’ for holding bank deposits. They really want banks to lend, rather than park funds with central banks. More QE is entirely possible too.
In the UK, there has been an announcement that reinforces the changing nature of ‘money’; One of the world’s largest bank note printer is reducing its size as demand for its products sink in the face of the digital age. Bank notes seem to be going the way of gold. The nature of ‘money’ has changed and continues to evolve.
In Australia, China has been blamed for a cyber attack on Australia’s Bureau of Meteorology that may have compromised computer systems across their federal government, or so the Australian Broadcasting Corporation reported, citing unidentified sources. The BOM runs one of Australia’s fastest supercomputers.
And data out overnight for October shows that global airfreight volumes flatlined.
In New York, the UST 10yr yield benchmark has inched up to 2.19%.
The US benchmark oil price is lower at US$40/barrel, while the Brent benchmark is at US$43/barrel. Larger than expected stocks of unsold oil products in the US is behind today’s price falls. Oil prices are near a six year low and a meeting by cartel OPEC this week is not expected to cut production. Price pressure will be with us a while yet.
Very low energy costs are keeping price changes low everywhere. The latest to release data on that is the Eurozone.
The gold price also took another fall in trading today and is currently down US$9 to US$1,054/oz.
The New Zealand dollar has slipped back a bit on a rising USD, currently at 66.3 US¢. It’s also down against the Aussie following yesterday’s surprisingly positive GDP data, now at 90.7 AU¢. And it is at 62.7 euro cents. The TWI-5 starts the day at 72.1.
If you want to catch up with all the local changes yesterday, we have an update here.