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Here's our summary of key events overnight that affect New Zealand, with news key economic indicators are pointing lower.
In the US, the advance June new orders report for durable goods was up +2.0% from May, but with zero growth from the same month in 2018. There was a further sting in this data because the May data was revised sharply lower. Retail inventories fell, wholesale inventories rose. And the merchandise trade balance deficit came in slightly worse than analysts were expecting (they we expecting to see an improvement by now, but it didn't materialise).
None of this impressed equity markets and today's S&P500 index is down -0.4%. Earnings reports have been missing analysts expectations even though companies have been trying to set them lower anyway.
And now the Atlanta Fed's GDPNow tracker has set their Q2 growth estimate at +1.3% pa, a reduction of -0.3%.
Next week in Shanghai, there will be another face-to-face meeting, this time in Shanghai, to try and patch together a US-China trade agreement. But expectations are low for progress. China seems in no mood to concede anything.
In China, there is more evidence that the yuan is making virtually no progress on the international scene as a payments currency. SWIFT says that 1.28% of transactions in June where yuan denominated. That is virtually the same as the 1.25% in May. And it is miles less than the 45.9% for the US dollar (and rising) and the 32.1% for the euro (and falling).
Shanghai rose +0.5% yesterday while Hong Kong (+0.3%) and Tokyo (+0.2%) also gained.
In Germany, businesses see no recovery ahead and the influential IFO survey of business sentiment there paints an increasingly somber picture in the world's fourth-largest economy and the heart of the eurozone (it's 40% larger than the UK). The downward track is worrying the ECB and in their overnight review of monetary policy, Draghi acknowledged things are getting "worse and worse", especially for the region's factories. It said it is ready to restart a stimulus program.
This gloomy outlook hit the German stock exchange hard, with the DAX down -1.3%. Other European markets didn't react as negatively.
In Australia, their central bank signaled they are prepared to ease policy again if required and said Australians should "expect an extended period of low interest rates." This was something of a surprise to markets who had expected them to declare the end of interest rate targeting. But instead the RBA defended the policy. Savers are facing severe outcomes.
The UST 10yr yield is marginally higher at 2.08%. Their 2-10 curve is at +22 bps and their negative 1-5 curve is now at -14 bps. The Aussie Govt 10yr is down -2 bps at 1.26%. The China Govt 10yr is unchanged at 3.18%, while the NZ Govt 10 yr is down -3 bps at 1.56%.
Gold is down -US$5 overnight to US$1,416/oz.
US oil prices are marginally firmer today. They are now just on US$56/bbl. The Brent benchmark is just on US$63.
The Kiwi dollar is -½c lower today and at 66.6 USc. On the cross rates we are softer at 95.9 AUc. Against the euro we are down to 59.8 euro cents. That takes the top off the TWI-5 to be just under 71.8.
Bitcoin is now higher than this time yesterday but has remained volatile in-between. Right now it is US$9,987 which is +3.4% higher than this time yesterday. Volatility has been 6.4%. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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