Here’s my summary of the key events overnight that affect New Zealand, with news of rising concern over Australian mortgage stress.
But first in the US, factory activity is still growing but the rate of growth slowed in April with weaker expansion of output and new orders. Another survey showed input prices rising at their fastest pace since September 2014. Meanwhile, while consumer spending was unchanged in March and a key inflation measure recorded its first monthly drop since 2001. The US Fed is meeting this week to assess its policy rates and some analysts expect it to raise the rate by +25 bps on Thursday our time. But that is not the consensus, which is still for no-change this meeting.
Bloomberg is reporting that President Trump is actively considering breaking up the big Wall Street banks. And he is considering raising taxes on petrol.
The President failed to get any funds for his border wall. And renegotiating NAFTA may prove quite different than his rhetoric; in fact Mexico is suggesting they use the TPP as a basis for a renegotiated trade deal. The Trump concerns over China may just put that deal back on the table.
In Japan, factories are expanding faster especially from new export orders. But price pressure are showing up here as well.
In Australia, a new report says household financial stress is reaching ‘worrying levels’. And regulators are taking notice of the survey. Affluent suburban areas feature among an estimated 1000 households a week expected to face mortgage default over the next 12 months, the analysis reveals. “Debt stress momentum is unprecedented,” according to research firm Digital Finance Analytics, who have been doing this survey for more than 15 years. The number of borrowers in severe distress has increased by about one-third to about 32,000 in the past 12 months they say. One-in-four households are said to be facing financial distress follows the March warning by the RBA about increasing family “vulnerability” caused by soaring property prices, particularly in Melbourne and Sydney.
In New York, the UST 10yr yield is up today and now at 2.32%.
Oil prices are still slipping lower and now just under US$49 for the US benchmark, while the Brent benchmark is now just over US$51.50 a barrel.
The gold price is also down, slipping -US$10 today to US$1,256/oz.
The New Zealand dollar will open a little higher at 69.1 USc. On the cross rates the Kiwi dollar is at 91.7 AU¢ and against the euro at 63.4 euro cents. The NZ TWI-5 index is now at 73.8.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».