Here’s my summary of the key events overnight that affect New Zealand, with news of a calmer day yesterday on the Shanghai markets as China’s big SOE’s stepped in as buyers.
But first, American consumer confidence took its biggest tumble in four years in July on a less upbeat jobs outlook, while house price increases in major cities slowed down in May, suggesting a spring pause in housing demand but price growth was still ‘solid’.
However, US stocks are sharply higher today and on track to break a five-day losing streak as a sell-off in Chinese stocks eased and investors shifted focus to corporate earnings. UPS and Ford both delivered better than expected results.
Tomorrow we get the results of the US Fed’s latest policy meeting. Anything but a confirmation of a 2015 rate rise will be seen as a back-track.
In Europe, conflicting statements and denials flew between Athens and Brussels overnight in a war of nerves highlighting the depth of mutual mistrust over a new round of negotiations on an €86 bln bailout that started this week.
In China industrial profits dropped -0.3% in June from a year earlier, the worst in three months, partly due to the equity market sell-off.
In New York, the UST 10yr yield benchmark is still holding at 2.24%. Our swap rates rates had a small bounce overnight and are at their highest level at the short end in more than a week. Also this morning Westpac has matched BNZ’s record low two year home loan rate of 4.69%..
Oil markets are still very low. The US benchmark price is at US$48/barrel, and Brent crude is at US$53/barrel, basically unchanged from yesterday.
The gold price is still at only US$1,097/oz.
The Kiwi dollar starts today stronger again, at 66.8 US¢, at 91.2 AU¢, and at 60.5 euro cents. Overall, the TWI-5 is almost 100 bps higher today at 71.6.
And stay tuned for a speech by Graeme Wheeler, RBNZ Governor, at 9am this morning. It is likely to be important.
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 »