Here’s my summary of the key events overnight that affect New Zealand, with news China is continuing to cause markets to yo-yo.
The Shanghai Composite closed down 1.3% on Wednesday, after a seesaw session.
After markets closed, China’s central bank announced it would pump another 140 billion yuan (US$22 billion) into the economy through a short-term liquidity operation. The loan comes further to the People’s Bank of China on Tuesday essentially injecting US$106 billion into the economy through rate cuts.
US stocks have rebounded, after failing to do so yesterday. The S&P 500 and Dow Industrials have gained nearly 4%.
The recovery comes as investors eye a solid durable-goods report and stimulus in China. Data out overnight shows orders for long-lasting US goods rose more than expected in July, and demand in a key category that tracks business investment plans jumped by the largest amount in 13 months.
The Federal Reserve’s New York president has come out saying stock-market turmoil has weakened the case for it raising interest rates in September. William Dudley says the case for a hike is “less compelling” than just a few weeks ago. He is the most senior US central banker to speak publicly since the market rout began.
In Europe, markets fell over overnight as investors wrestled with the turmoil in China and the US.
Commodity prices are continuing their downward spiral.
The US oil price has fallen from this time yesterday, edging below US$39 a barrel. Brent crude remains at US$43 a barrel.
The price of unleaded petrol at the pump in New Zealand has dropped 14 cents a litre over the past six weeks, with the AA expecting it to keep falling below $1.80.
Gold has fallen another US$14 today, to US$1,125/oz.
In New York, the UST 10yr yield benchmark is continuing to recover today. It’s up to 2.13%.
The New Zealand dollar has weakened to 64.3 US¢, following the positive US data out overnight. Other than a blip in the dollar on Monday, it’s the weakest it’s been against the US since 2009. The dollar’s dropped to 90.4 AU¢, and 56.7 euro cents. The TWI-5 has recovered to 68.9.
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 »