China data mixed; China goes all-in on housing rescue; UN sees India rising; EU inflation eases; nickel price jumps; SkyCity hit less than expected; UST 10yr 4.42%; gold at ATH and oil up; NZ$1 = 61.4 USc; TWI-5 = 70.4

Here's our summary of key economic events overnight that affect New Zealand, with news China is rushing billion of support to shore up their wavering property sector.

But first, China's industrial production growth recovered in April after a disappointing March to be back the expansion level in the prior three months. But this is the only 'good news' in yesterday's data dump from the Middle Kingdom.

Their retail sales rose by only +2.3% year-on-year in April, down from +3.1% in March and missing market forecasts of +3.8%. That is quite a miss.

Electricity production slipped in April from March to be up only +3.1% in the year. That is a long way lower than the +8% rise in the year to December. If 3.1% is a proxy for GDP, they are not on track to achieve Beijing's growth targets.

Prices for new dwellings fell their most since July 2015. Prices for resales fell even more. The depth of their property sector retreat is laid bare here - and this is official information. It is no wonder they are considered a wholesale state intervention in the sector.

To clear away the drag that their property market has created, Beijing has taken some 'drastic moves'. The central bank has removed its lower limit banks can charge for home loan rates, nationally. It has cut interest rate benchmarks for housing-related lending by -25 bps.

And it has allocated ¥300 bln (NZ$42 bln) for lending aimed at buying by local authorities for unsold housing for "social purposes". They said the ¥300 bln of central bank cash will translate into an estimated ¥500 bln of credit overall.

We should keep an eye on their giant car manufacturing industry too. Its sales options are being constrained by new US tariffs, plus the market-dominant players are cutting prices aggressively too. (BYD cut another -5% this week.) Few are going to report profits in the current year, and many may not even survive. Competition this fierce is unstable for a nationally-important manufacturing base. It would be no surprise if beijing has to set it to clean things up here too.

The UN says India’s growth will rise in 2024 to +6.9%, from the 6.2% they estimated in January, driven by strong public spending and growing private consumption. The other big mover is Brazil, up to an expected +2.1% in 2025 from a January estimate of +1.6%. The US is still expected to expand +2.3%, Japan by +1.2%, China by +4.8% and the EU by +1.0%. Australia is +1.6%. New Zealand is ignored by this UN review.

The EU released its final April CPI rate which came in at 2.6% for the block, 2.4% for the Euro Area. Bothe were little-changed from March but sharply lower than a year ago. In April 2023 the EU rate was 8.1%. the Euro Area was 7.0%. Getting rid of dependence on Russian oil and gas has not been at the cost of higher inflation. But we should observe that the range is wide across the bloc between countries. Denmark recorded at 0.5% annual inflation rate in April, whereas Belgium 4.9% and they are less than 700 kms apart.

We should note that the social tensions in New Caledonia are echoing in the nickel market because there is an important mine there. It is the world's third largest producer, and my help explain why France isn't taking any backward steps. Global nickel prices have risen more than US$2000/tonne, up +11.2% over the past week over supply fears. It is a key ingredient for making stainless steel.

In Australia, casino operator SkyCity Entertainment (SKC) has said it had agreed to a proposed penalty with the AML regulator AUSTRAC, admitting it had broken the law by not carrying out customer due diligence with higher-risk customers. It will cost them NZ$73 mln to resolve the matter. It has provided for about $150 mln in its accounts in anticipation, so oddly it will get a profit boost when it reconciles the provision with the actual penalty.

The UST 10yr yield is now at 4.42% and up +4 bps from this time yesterday but down -8 bps from this time last week. The key 2-10 yield curve inversion is less at -40 bps. Their 1-5 curve is shallower at -69 bps. And their 3 mth-10yr curve inversion is shallower at -95 bps. The Australian 10 year bond yield is now at 4.29% and up +3 bps. The China 10 year bond rate is unchanged at 2.32%. The NZ Government 10 year bond rate is now at 4.66% and up +3 bps from yesterday but dowen -14 bps from a week ago.

Wall Street's Friday session was up a minor +0.1% on the S&P500, but up +1.3% for the week. Overnight European markets all fell about -0.2%. Yesterday Tokyo ended its Friday session down -0.3% for the day but up a strong +1.5% for the week. Hong Kong rose +0.9% to be +4.7% higher for the week. Shanghai jerked +1.0% higher at its close to be +0.5% up for the week. Singapore ended up +0.3% on Friday. The ASX200 ended its Friday session down -0.9% to limit its weekly gain to +0.8%, and the NZX50 fell -0.2% to end its week down -0.5%.

The Fear & Greed index has moved back into the "greedl" range as risk appetites return.

The price of gold will start today up +US$39 from yesterday at US$2419/oz. That is up US$50 for the week and a new all-time high. Silver has shot up too, up +12% for the week.

Oil prices are up +50 USc today to just over US$79.50/bbl in the US while the international Brent price is now just on US$83.50/bbl. Both are a bit more than +US$1 higher that a week ago.

The Kiwi dollar starts today up +20 bps from yesterday at just under 61.4 USc. That is up +120 bps in a week. Against the Aussie we are up at 91.7 AUc and a new one month high. Against the euro we are also firm at 56.4 euro cents. That all means our TWI-5 starts today just on 70.4, up +20 bps from yesterday and up +80 bps in a week.

The bitcoin price starts today at US$66,847 and up +2.9% from this time yesterday. And up +10.6% from this time last week. Volatility over the past 24 hours has been modest however at +/- 1.8%.

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