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Here's our summary of key events overnight that affect New Zealand, with news American industrial activity is waning from a good level, and China's is rising from a weak level.
Analysts are bracing for very negative American car sales reports for September with some seeing a decline of more than -10% year-on-year.
That is showing up in factory activity data. The influential Chicago regional purchasing managers index has drifted back into contraction.
The September update of the Dallas Fed regional survey, which has been the most optimistic of this series, is still generally positive but many indicators including the current General Business Outlook one, are sliding.
China has reported its official factory PMI for September and although it is still contracting, the degrade is now quite minor. They will take that as a 'win' in the current climate. Better for them, their services PMI is stable at a healthy expansion. These official survey actually have credibility because the independent private sector sets all show a better situation. In fact, the Caixin PMI rose in September to its highest level in 20 months, showing a solid expansion among its surveyed firms.
In Japan, they have just increased their GST to 10% and this encouraged a rush to buy big-ticket consumer items in the past few weeks. But, industrial output data isn't flash according to their official statistics, down -4.7% year-on-year in August.
In Hong Kong, not only do they have trouble on the streets and tensions ahead of China's big celebrations, their air quality is terrible with heavy smog wafting over from China causing dangerous conditions. But there is more than just smog coming in from China; the PLA have reinforced their Hong Kong garrison to 12,000 troops, a doubling in recent days.
In the EU, their jobless rate ticked lower in August, now down to 7.4% with a range of 17% in Greece to 2% in the Czech Republic.
New research in Australia shows that 38% of their exports are sold to China. The political tensions between the two countries don't seem to be inhibiting trade. For perspective, the same relationship has New Zealand far less dependent, selling 26% of our exports to China in the year to August.
The UST 10yr yield is little-changed at 1.68%. Their 2-10 curve positive at +6 bps. Their negative 1-5 curve is unchanged -21 bps. Their 3m-10yr curve is also unchanged at -26 bps. The Aussie Govt 10yr is now at 1.02%, an overnight rise of +7 bps. The China Govt 10yr is unchanged at 3.16%. The NZ Govt 10 yr is at 1.12%, a -1 bp dip from yesterday.
Gold is down sharply, down -US$27 to US$1469/oz.
US oil prices are also lower today, down more than -US$1 and now just under US$55/bbl. The Brent benchmark is just under US$61.
The Kiwi dollar is weaker today, now at 62.6 USc. On the cross rates we are down to 92.8 AUc. Against the euro we are at 57.4 euro cents. That puts the TWI-5 back down to just on 68.3.
Bitcoin is now at US$8,263 and +3% higher than this time yesterday. 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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