US adds 156K new jobs, pay rises +2.9% pa; sudden rush of bond issuance; surprise Aussie trade surplus; China fx reserves slip; UST 10yr yield at 2.42%; oil unchanged, gold lower; NZ$1 = 69.6 US¢, TWI-5 = 76.1

Here’s my summary of the key events over the weekend that affect New Zealand, with news of booming commodity exports in Australia.

But first, new job creation in the US was modest in December, coming it as expected at +156,000 and right on their long-term average. But the November new jobs data was revised up from +178,000 to +204,000. 2.2 mln new jobs were created in 2016, on top of the 2.7 mln created in 2015. And even more impressively, pay rates rose, more than making up for the surprise unchanged level in November. The average American wage is now US$26.00/hr (NZ$37.15), a +2.9% rise in a year and the fastest increase since 2009. Some analysts are now expecting 2017 wage gains to top +3.5% pa now that the unemployment rate is below 5%.

2017 has opened with a huge rush of corporate bond issuance. More than US$20 bln was issued on the first trading day of the year, a record by miles, and that included BNZ-parent NAB issuing US$3.5 bln of it. Treasurers are trying to lock in current interest rates in the expectation that they are about to rise.

Across the ditch, Australia has posted a surprise trade surplus in November of more than AU$1 bln on a sudden surge in exports. Driving that were the most iron ore exports since August 2014 and the most coal exports since January 2012. This surge is expected to last until the middle of the year.

In China, data out there over the weekend shows that their foreign currency reserves continue to shrink, but at a slower pace. They now stand at US$3.01 tln, down about US$41 bln from the November level. Beijing has taken measures recently to slow the outflow and being active with the exchange rate is one way it can keep the USD value above the psychologically important US$3 tln level.

And, if you are still on vacation and have a couple of hours, here is a link to a panel discussion in Chicago on Saturday with five Nobel Prize-winning economists on what is in store in 2017. Most see the 2016 issues of excess debt, inequality, and recession risks getting starkly worse after a flurry of new quick-fix policies that only benefit a few.

In New York, the UST 10yr yield is now 2.42%. Remember, this is a rate that was up over 2.60% before Christmas.

Oil prices are now just under US$54 for the US benchmark, while the Brent benchmark is now just on US$57 a barrel. The US rig count is up yet again last week, now at a one year high.

The gold price will start a little softer today at US$1,172/oz.

The New Zealand dollar ended last week at 69.6 US¢. On the cross rates it is holding at 95.5 AU¢, and against the euro up at 66.1 euro cents. The NZ TWI-5 index is at 76.1.

If you want to catch up with all the changes on Friday, 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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for(i=0;i

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