US factory output falls; Canada house sales fall; ditto Singapore; China's loans for B&R over NZ$125 bln; Aussie jobless rate falls; UST 10yr yield 2.16%; oil and gold drop; NZ$1 = 72 US¢, TWI-5 = 76.4

Here’s my summary of the key events from overnight that affect New Zealand, with news of sharp adjustments in some foreign housing markets.

But first in the US it is the same data story – underwhelming results. American factory output fell unexpectedly in May from April on a broad decline in production, including the production of cars. Capacity utilisation also slipped. But both measures are higher than the same month a year ago. Still, the results were under market expectations.

And the rate of unemployment claims also came in under expectations, even though they improved marginally. The problem is that this is the strongest part of the annual cycle and weakness now can be telling. both of today’s data casts a shadow over the American economy’s rebound from a slowish start to the year.

In Canada, sales of existing homes in fell sharply in May from the prior month, recording the biggest month-on-month decline in nearly five years. This follows Ontario changes that appear to have “squelched” speculation and rapid price gains in the Toronto market. National sales volumes were -1.6% lower than the same month a year ago. The national average price was up +4.3% year-on-year, but -5.1% lower than the previous month. However, the average May price is still the third highest ever, and it is driven by Vancouver and Toronto markets, where volumes are sharply lower, but prices are staying stubbornly high.

But the Canadian drop is nothing like the drop in Singapore, where new residential sales volumes were down -34% in May from April. Sales of existing units also fell, but a more modest -0.8%. No price data was released there however.

In China, their export-import bank says that its outstanding loans for their Belt and Road Initiative were more than NZ$125 bln at the end of March in support of more than 1200 projects.

In Australia, their unemployment rate has fallen to its lowest level in four years after the biggest rise in a decade in the number of hours worked by Aussies. The data showed the strong jobs creation was all in full-time employment, with 52,100 full-time positions added to the economy while 10,100 part-time ones fell away.

In New York, the UST 10yr yield ground out a small gain to 2.16%. Local swap rates will open today at their lowest since November last year after yesterday’s shift lower.

The price of oil has slipped again and is now just under US$44.50 a barrel, while the Brent benchmark is now just under US$47. That makes them at six month lows. Production rises are causing the glut.

And the price of gold down sharply and now at US$1,253/oz, a -US$14 drop.

The Kiwi dollar is just a little lower this morning, but actually fairly resilient after yesterday’s underwhelming GDP data. It is at 72 USc. On the cross rates we are at 95.1 AU¢, and 64.6 euro cents. The TWI-5 index is now at 76.4.

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 ».

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