Here's our summary of key economic events over the Christmas and Boxing Day period with an update on some key global economic trends.
The US Redbook index of retail sales surged back to be +5.9% higher than year ago levels last week at physical stores. And Mastercard confirmed it also experienced good year-on-year activity, especially for online transactions (+6.7%).
Meanwhile American initial jobless claims rose marginally last week, but by slightly less than seasonal factors would have expected.
There was no mortgage application activity release for last week, but the FreddieMac survey of home loan rates showed they rose for a second consecutive week in the period - and to their highest level since July.
The Richmond Fed survey of mid-Atlantic state's factories remained soft, but less so in December. New order intakes retreated less that recently.
Rising interest rates were also a feature of the two US Treasury bond auctions over the past few days. Both were well supported, but at higher yields. The five year came in at 4.43% and up from 4.15% at the prior equivalent event a month ago. The seven year came in at 4.49%, up from 4.14% a month ago. Both are actually big moves.
In China, their central bank released ¥300 billion into financial institutions via a one-year medium-term lending facility on December 25, at an unchanged rate of 2.0%. This was as expected, signaling they are keeping their powder dry for a little longer on this front.
China deregulating and decentralising its bond investment decisions to get financial support released faster. Bloomberg is reporting that Beijing is allowing local officials to invest in more areas with a key government bond while also simplifying its approval process in a bid to make better and quicker use of these central government funds.
At their Central Economic Work Conference, China held on to its "about 5%" growth target. But analysts are now pretty sure that is out of reach, an aspiration that is unlikely to be achieved.
And staying in China, this story may interest readers - how the Mowbrays made their billions and what they are up to next. Cheap and disposable toys have made them billions. Next they are to use those supply-chain skills for housing.
Based on their fast-expanding electronics sector, Singapore's industrial production rose +8.5% year-on-year in November, although below market expectations of a +10% gain. This follows only a 1.2% rise in the previous month.
In India, they said they expect their economy to grow at around +6.5% in the year through March, against the +8.2% expansion in the year before. There has recently been an unexpected slowing in the July-September quarter. (Link may not work for some readers outside India.)
In Turkey, they pushed though an unexpected rate cut overnight, reducing by -250 bps to 47.5% in its December decision, and ending the nine-month stretch of borrowing costs which were at a 14-year high. The last time they had a rate cut was in February 2023. Turkey's inflation rate has fallen from 75% to 47% over the past six months.
The UST 10yr yield is now at just on 4.58%, and down -1 bp from Tuesday, but it did hit 4.64% in between although it is retreating today. The key 2-10 yield curve is more positive, now by +26 bps. Their 1-5 curve inversion is +23 bps and more positive. And their 3 mth-10yr curve is also more positive at +31 bps. The Australian 10 year bond yield starts today at 4.50% and up +3 bps. The China 10 year bond rate is now at 1.73% and up +2 bps from Tuesday. The NZ Government 10 year bond rate is now at 4.55% and unchanged.
Wall Street has started its Thursday session essentially unchanged on the S&P500. Overnight, European markets were mixed in a -0.2% to +0.4% range. Tokyo ended its Thursday session up +1.1%. Hong Kong was also up +1.1%, but Shanghai only rose +0.1%. Singapore dipped -0.2%. The ASX200 and the NZX50 didn't trade of course.
The price of gold will start today at US$2630/oz and up +US$16 from yesterday.
Oil prices are up +US$1.50 at just under US$70/bbl in the US while the international Brent price is still just on US$73.50.
The Kiwi dollar starts today just under 56.3 USc and down -20 bps from this time Tuesday. Against the Aussie we are down -10 bps at 90.4 AUc. Against the euro we are down -20 bps at 54 euro cents. That all means our TWI-5 starts today at just on 66.9 to be down -10 bps from Tuesday.
The bitcoin price starts today at US$96,146 and up +2.7% from this time on Tuesday. Volatility over the past 24 hours has been moderate at +/- 2.5%.
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10 Comments
'Cheap and disposable toys have made them billions. Next they are to use those supply-chain skills for housing.'
They have turned energy from a one-off source, and materials ditto, into proxy. Which - in lieu of both, is worthless. And they've increased the waste output, via said disposable cr-p.
Skills acquired?
Cr-p housing, quickly disposable? Reliance on quasi-slave labour elsewhere? I don't call that skill.
They have turned energy from a one-off source, and materials ditto, into proxy. Which - in lieu of both, is worthless. And they've increased the waste output, via said disposable cr-p.
What proportion of the world population do we need to cull to right the ship Power? 80%?
China, India, and Global South people will obviously be first to the killing fields and Aotearoans will be the 'special ones' considering our privileged status and consciousness of all things environmental.
Rising yields indicate there is less demand for them at this time so yields must rise to attract buyers.
Does that suggest global yields will rise in the future? Not necessarily. It could be a lessening of confidence in holding USD denominated debt.
Can't think why that would be. Can you? ;-)
edited: I did warn people some months ago about where the NZD was likely to go. In a nutshell - a country can't continue to borrow overseas, while the govt stymies the economy through mismanagement, while having a clueless central bank, without a release value, ala the NZD, being triggered.
The IMF has told the federal government and Coalition that Australia needs a major policy package to deal with the nation’s unaffordable housing.
The politicians don't want to hear this. Boomers don't the global acronyms saying things that threaten the status quo.
The International Monetary Fund has told the federal government and Coalition that Australia needs a major policy package to deal with the nation’s unaffordable housing, saying everything from tax to the supply of new land should be on the table.
https://www.smh.com.au/politics/federal/get-your-housing-in-order-imf-w…
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