Here’s my summary of the key events overnight that affect New Zealand, with news the US economy and job market continue to strengthen.
The Federal Reserve has released a statement, indicating it’s leaving the door open for a possible interest rate hike in September. It says the economy has overcome a first-quarter slowdown, and is “expanding moderately”, despite a downturn in the energy sector and headwinds from overseas. It says there have also been “solid job gains” in recent months.
Staying in the US, new data reveals house sales dipped in June after five consecutive months of increases. However they still remain near May’s levels, which were the highest in over nine years. The median house price for 2015 is expected to increase by around 7% to NZ$332,850. This would match the record high set in the US in 2006.
Russia’s central bank has halted daily purchases of foreign currency in an attempt to stop a week-long slide of the ruble that has raised fears of a second currency collapse in a year. This week’s drop threatens to undo months of recovery since an unprecedented fall over the Russian winter.
The China Securities Regulatory Commission is investigating Tuesday morning’s historically sharp dive in the markets. Regulators have previously said “malicious short sellers” will be punished. The head of the IMF backs the Chinese government’s efforts to contain the stock market sell-off. She says China’s economy is resilient and the turbulence is partly a reflection of an immature market.
In New York, the UST 10yr yield benchmark is up to 2.29%.
The price of oil remains very low. The US benchmark price is at US$49/barrel, and Brent crude is at US$53/barrel, basically unchanged from the past couple of days.
The gold price is still at only US$1,097/oz, as demand is at a six-year low.
The New Zealand dollar is at a similar level as it was this time yesterday. It’s back at 66.7 US¢, after strengthening slightly in the lead up to the Fed’s announcement overnight. The dollar’s at 91.4 AU¢, and at 60.6 euro cents. The TWI-5 is at 71.7.
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 »