Here's my summary of the key issues from overnight that affect New Zealand, with news of Greece on tenterhooks.
Firstly, in the US, existing home sales for January cooled compared to December and were at their lowest rate in nine months. Still, the pace was higher than the same month a year ago for the fourth straight month.
Staying in the US the latest Fed region factory surveys out overnight were mixed; they were improving in the Chicago area but there was a no growth in the Dallas area - the oil patch. The Richmond Fed will report later today and that is expected to be a positive survey.
In Europe we are waiting to hear details of the Greek plan. But trouble is brewing in the neighborhoods of Athens as the extent of the climb-down sinks in. It's a potentially explosive case of grand over-promising, under-delivering.
Giant global London bank HSBC has reported a -17% fall in annual pretax profit and cut its profit targets, saying allegations its Swiss business had helped customers to dodge taxes had brought shame on the bank.
But as this quote shows, it still seems to think what they did in the past was acceptable back then. "The recent disclosures around unacceptable historical practices and behaviour within the Swiss private bank remind us of how much there still is to do and how far society’s expectations have changed in terms of banks’ responsibilities." Society's expectation have not changed at all - facilitating tax rorting was never acceptable. The bank's boss has NZ$10 mln of his own money in a Swiss account of the bank. There is still deep-seated denial at the very top of this bank and that is hugely concerning for a bank with assets of NZ$3.5 tln and leverage of 13.2 times. It is a bank that is systemically important on a global basis, and the most charitable interpretation in all this is that it is run by arrogant managers in London and Hong Kong.
In China, there has been a development to tuck away for future reference. It has started assembly of its first medium-range commercial jet, the C919, to compete with Boeing and Airbus. The domestic market will need more than 5,000 of these types of planes over the next 20 years, a market worth more than NZ$1 tln. The C919 already has orders for 450 aircraft. You will be flying in one in the not too distant future.
In Australia, NAB chief executive Andrew Thorburn will have to face questions at a Senate inquiry as soon as next week following revelations of misconduct in the bank’s financial planning division, and the sacking of 37 of its financial advisers. This scandal comes after rival CBA is going through a similar advice scandal. "Banks" and "advisors" seem to be a very problematic mix.
The UST 10yr yield fell back overnight to 2.07% in New York. We start today with our swap rates for terms 2 - 10 years higher by about +3 bps and the flat curves we noted a month ago have now disappeared.
The crude oil price, however, starts today lower again at US$49/barrel with Brent crude down a tick to US$59/barrel.
The gold price is virtually unchanged at US$1,198oz.
The New Zealand dollar is moving up and is now at 75.3 USc, up ½c at 96.5 AUc, and the TWI is at 78.7.
If you want to catch up with all the changes on Friday, we have an update here.
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