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Here's our summary of key events overnight that affect New Zealand, with news bond market signals aren't getting any better even if a set of data out today isn't so gloomy.
In the US, their advance retail sales report for July was good with them advancing +3.4% above the same month in 2018. This was similar to the prior month gain and given that American inflation is +1.8%, that represents a small but positive 'real' increase. (Petrol prices produced no distortions this month.)
But US industrial production data wasn't as positive, declining from June and up only +0.5% in the full year from July 2018. Only 'mining' (read oil production) kept it positive; factory production was -0.5% below the same month a year ago. Analysts are surprised by this drop.
Still, two regional factory surveys out overnight, one in the New York area, and one in the Pennsylvania area, both were quite positive, each with 'modest' gains.
In Canada, home sales there rose for the fifth month in a row, recovering +12% from a weak month the year before.
And there was a positive July payrolls report in Canada too from the unofficial ADP survey.
Overnight European markets held their lower levels and moved somewhat lower. The exception was London which dropped a further -1.1%. They followed Asia where end-of-session gains were recorded in Shanghai and Hong Kong, but Tokyo fell a rather sharp -1.2%. Wall Street has opened somewhat confused about where to go with little net change so far.
But US Treasury 30 year yields have fallen below 2% for the first time ever as bond markets continue their slide. US Treasury 10 year rates at 1.52% is also a three year low.
Around the world, the number of central banks responding to the growing gloom is now up to 30 of them cutting rates in 2019 and only one of these cutters has a rate lower than New Zealand's 1.00%, Sweden which has a negative -0.25% rate. All the others have much more rate-cutting ammunition left.
In China, they are actioning counter-measures on imports from the US in retaliation for the latest US 10% tariff, even after the US delayed theirs. Prospects for the US farm belt exports look particularly rough.
China home prices are rising at about a +7% annual rate but the steam seems to be still building for these gains. In June 63 of 70 large cities recorded an increase. In July that is up to 67 of 70.
The UST 10yr yield has fallen consistently overnight, down another -5 bps to be at just under 1.53%. Their 2-10 curve is at just +3 bps, and their negative 1-5 curve is wider at -31 bps. The widely-watched 3mth-10yr curve has ballooned out to negative -49 bps in a sharp shift. The US 30yr is about to go under 2% yield and an all-time record low. The Aussie Govt 10yr is at 0.88%, down another -5 bps from yesterday. The China Govt 10yr is unchanged at 3.03%, while the NZ Govt 10 yr is also down, today by -8 bps to 1.05%.
Gold is up another +US$9 today to US$1,523/oz.
US oil prices have dropped again today, down by more than -US$1, and are now just on US$54/bbl and falling. The Brent benchmark is now at US$58.
The Kiwi dollar is not a lot changed today but if anything it is firmer, at 64.5 USc. On the cross rates we are softish at 95.1 AUc. Against the euro we are up to 58 euro cents. That puts the TWI-5 little-changed at 69.8.
Bitcoin is also little-changed, down just -1.9% to US$10,008 and a new low for the month. 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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