Here’s my summary of the key events overnight that affect New Zealand, with news of surging loan demand in China.
But first, the number of Americans filing for unemployment benefits rose less than expected last week, pointing to a tightening labour market in the US, one where we are starting to see faster wage growth.
Air travel rose +7.6% in November worldwide, and a remarkable +9.9% in the Asia/Pacific region. Actually, domestic air travel in China, India and Russia rose by more than +15% year-on-year, underpinning the overall data. Mature Western markets did not see growth anywhere near that and in fact the data for Australia actually shows a fall.
Worldwide, demand for personal computers fell for the fifth year in a row in 2016, as computer makers struggled in an increasingly mobile connected world. They fell to below 300 mln units, a level they have not been down to since 2008. Meanwhile smartphone sales rise relentlessly.
Germany has reported GDP growth of +1.9% in 2016, the third year in a row where it has risen.
In China, bank lending surged above expectations in December. The lending spurt reached US$150 bln in the month and well above the US$100 analysts were expecting. A government infrastructure push, improving corporate profits as producer prices rise and rising bond yields all helped push up the appetite for bank loans.
In New York, the UST 10yr yield is lower again today, now at 2.32%. Markets are suffering some sort of Trump-deflation following a press conference yesterday where it became clear very little detail is coming soon about the plans of the new American administration. The greenback is in retreat.
Oil prices are up again today, now just on US$53 for the US benchmark, while the Brent benchmark is now just on US$56 a barrel.
The gold price is also higher, up +US$17 from this time yesterday to US$1,204/oz.
The New Zealand dollar is also a lot stronger today, up more than 1c and now at 71.3 US¢. On the cross rates it is stronger as well at 95.1 AU¢, and against the euro at 67 euro cents. The NZ TWI-5 index is at 77.2, a four week high. The most volatile currency by far is bitcoin, however. You may recall we reported its record high price of US$1,129 earlier in the month. Yesterday it had slid to US$915 and earlier today it was at US$760 although it has ‘recovered’ to just on US$800 now. Now that’s currency depreciation.
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 ».