US consumer confidence slips; US house prices rise, US commercial property prices jump; China trade surplus narrows; Russia wants its money back; UST 10yr 2.42%; oil and gold stable; NZ$1 = 70.7 USc; bitcoin falls -US$700

Here’s our summary of key events from overnight that affect New Zealand, with news China’s trade surplus is shrinking.

But first in the US, consumer confidence slipped in December, after hitting historic highs in the previous month. The Conference Board’s index declined to 122.1 in December, a fall much greater than the 128.1 expected by analysts. The November reading was 128.6.

And staying in the US, pending home sales were flat in November, but prices are rising steadily. Sales prices were up +5.8% – more than double wage growth – and the 3.4-month supply of homes on the market was the lowest since records for this metric began in 1999.

And it is not just residential property that is rising, prices for industrial land have shot up this year due to strong demand for warehouses and a diminishing supply of viable sites. Average prices in the US shot up about +25% in 2017, according to real estate services firm CBRE. Driving the demand is warehousing for online shopping.

In China, they are looking to change their Constitution in a style reminiscent of what Russia did. The President is limited to two terms, but dictators don’t want that little detail like that to limit them.

China’s trade surplus narrowed to +US$28.8 bln in November 2017 but was still higher than analysts’ estimates. One reason for the slippage was a growing services deficit.

That trade surplus may narrow further. China’s crackdown on pollution is shuttering many industrial facilities until they can sort out their issues and that is driving imports. Copper, for example hit a four year high overnight on Chinese demand for exactly that reason.

And Russia is feeling the pinch, trying to get its oligarchs to repatriate US$1 tln. There is nothing but delicious irony is a scheme by a corrupt government wanting those it favoured with corruption to return corrupt money laundered from their activities. But it is hard to think of a reason why its oligarchs would succumb to such an appeal. Russia is also planning a national biometric database in 2018 to control its citizens financial affairs. And this is just after it banned a key opponent to Putin.

The UST 10yr yield is down sharply to 2.42% today. In China, the equivalent 10yr sovereign bond is yielding 3.91% while the equivalent NZ 10yr sovereign bond is yielding 2.75%.

Oil prices are marginally lower in the US today with the WTI benchmark at just under US$59.50 a barrel, while the Brent benchmark is just under US$66.50.

Gold is up US$1 to US$1,286/oz.

This morning the Kiwi dollar is just under 70.7 USc, and on the cross rates it is at 90.9 AUc, and against the euro it’s at 59.4 euro cents. That puts the TWI-5 at 73.3.

Bitcoin is down -US$700 today and now at US$15,080, a -5% fall.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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Source: CoinDesk