Here’s my summary of the key events over night that affect New Zealand, with news of clearer signs of interest rate changes on the way.
In China, a major shake-up of its vast State-owned enterprises is apparently underway in an attempt to modernise them and get them to operate in a way that meets their operating costs. The new ability to ‘hire and fire’ based on the enterprises’ needs may cause some social unrest.
The slowdown of economic activity in China has meant that they are no longer accumulating reserves. In fact, they now seem to be using them to support their ‘transition’. The back-story is that the bond markets have taken this in its stride.
In fact, interest rate rise pressure is not only coming from the US Fed, Chinese corporates are now paying a premium to borrow.
In Russia, their GDP shrank -4.6% in the second quarter from a year earlier after a -2.2% fall in the first quarter, the Federal Statistics Service in Moscow said overnight. This was a bigger fall than analysts were expecting.
In New York, the UST 10yr yield benchmark has risen in late trading today and is now at 2.22%.
The oil price has risen marginally and in the US, is now currently just below US$45/barrel, but Brent crude is now just back above US$50/barrel. But the move is mainly due to a major outage at the huge and sometimes troubled BP refinery at Whiting, Indiana. And Japan is getting ready to wean itself back off fossil fuel with a restart of its nuclear power generating capability.
And the gold price has jumped US$10/oz, now at US$1,103/oz.
The New Zealand dollar starts today basically unchanged at 66.2 US¢, at 89.3 AU¢, and at 60 euro cents. The TWI-5 is now at 70.8.
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 »