Here's my summary of the key events over the weekend that affect New Zealand, with news China is no longer exporting deflation.
First, however, in the US, Janet Yellen has suggested the Federal Reserve may need to change policies and run a "high-pressure economy" if it wants to reverse all the damage from the 2008-2009 GFC. She said this means they are looking at policies that would lower unemployment further and boost consumption, even at the risk of higher inflation, to get businesses to invest, improve confidence, and bring even more workers into the economy. She said they are not ready to make these changes yet and called for more research. But it is clear that some different 'bold' policy changes are in discussion.
On the ground, American retail sales came in quite positively. In September they were up +2.7% from a year earlier, up from +2.1% annual growth in August and easily outpacing price inflation. Sales for the third quarter as a whole they rose +2.4% from the same period in 2015. More car buying, and slightly higher petrol proces explain part of the rise.
China has reported its Producer Price Index rose +0.1% in September. Actually, this is a big deal. This data has been negative - that is, disinflationary - for a long time (54 months to be exact) so Chinese goods are now not getting cheaper any more. In fact, the change month-on-month is happening very fast. The days of China exporting deflation to the world may be over.
Further, their own CPI inflation is now running at +1.9%, ending a down-trend. Later this week, China will report its Q3 GDP growth, probably to much scepticism.
And there was a little factoid out over the weekend which will give you an idea of the sheer scale of China. They registered 6.2 mln new cars in the June to September quarter, bringing the total number of car on their roads to 190 mln. (The number of cars in the US is 253 mln.) The total number of all vehicles in China has now reached 280 mln.
In Australia, the insurer that declined 37% of its TPD claims has outed itself as "Company A", despite the regulator refusing to. It is the Westpac-owned BT Financial Group. They declined 58 of 137 claims in 2015 for "total & permanent disability". They said they paid out in 2,640 claims for other types of insurance. (BT Financial is run by Brad Cooper who was Westpac NZ's CEO for a year in 2007/08, and prior to that ran parts of the GE Money business.)
In NSW, their government is preparing their land title registry for privatisation. To make it look more attractive, it has raised fees, in some cases doubling them for this monopoly. One can only wonder what will happen when it gets controlled by an investor - CoreLogic is the likely buyer. Big jumps in fees won't help housing affordability, which already struggles with a high transfer tax.
In New York, the UST 10yr yield is up sharply, now at 1.81% and that is its highest in almost 20 weeks.
The US benchmark oil price is unchanged, still just under US$50.50 a barrel, while the Brent benchmark is now just under US$52 a barrel.
The gold price is a little lower, now at US$1,253/oz.
With one exception, the New Zealand dollar is a broadly similar level to this time on Friday. That leaves it at 70.9 US¢, and on the cross rates it dipped quite a bit and is at 93 AU¢, and it's unchanged at 64.6 euro cents. The NZ TWI-5 index is now at 75. We are also at another new high against the sinking pound; 58.1 British pence.
If you want to catch up with all the local changes on Friday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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