Here's my summary of the key events over the weekend that affect New Zealand, with news the Aussie housing markets are getting worryingly frothy.
But first, American job growth slowed sharply in March amid continued layoffs in the embattled retail sector, but a drop in the unemployment rate to a near 10-year low of 4.5% suggested their labour market strength remained intact. The jobs growth was far below market expectations but markets are not expected to react much at all. This sort of survey result has happened before - and as recently as May 2016 - and that was followed by very strong gains in the subsequent month and most people expect that to happen this time. Average earnings rose +2.7% over the year.
China has stemmed its currency outflow. In March, their reserves stayed just marginally above US$3 tln, according to official data released over the weekend. They also announced tougher enforcement to keep it like that. However, they are also allowing their banks to go on a lending and spending spree outside the country. Like this.
And in China, there is an interesting process being started in the southwest. Beijing is pushing ahead with a regional 'agglomeration' that includes Hong Kong and Macau. It is an area with over 100 mln people and will be 'planned' as one unit. The days of an independent Hong Kong seem numbered. Actually if you look at a map of the area around Shenzhen and Guangzhou you realise just how small Hong Kong really is in the regional context.
In Australia, Ralph Norris, currently chairman of Fletcher Building and previous CEO of Commonwealth Bank told the Aussies they are not in a housing bubble and that banks will be easily be able to ride out any correction. But he did finger longer-term inadequate housing supply as the main driver behind the recent sharp rise in house prices.
But just how frothy those Aussie housing markets are was reinforced over the weekend. Preliminary figures for Sydney, where the number of auctions listed rose to 1,392 from from 1,104 over the previous week, show the clearance rate at 81.5%. Last week it was 78%. In Melbourne, the clearance rate was 81%, up from 79.6% the previous week. The total number of listings also increased to 1,458, a +27 jump from the prior week.
Singapore is often touted as one of the world's most expensive cities to live in. But the locals are buying it. They have developed a more extensive index based on local residents' experience rather than the more usual expat metrics. And the results are surprisingly different to the usual reports. On the basis of local incomes, costs and purchasing power, the world's most expensive city to live in for locals is ... Sydney. Melbourne, Brisbane, Perth and Adelaide are all in the top 11. And coming in at number twenty is Wellington, with Auckland at number 27 of this 103 city list. Don't dismiss this latest ranking too fast. It seems much more relevant to public policy discussion than the usually referred The Economist one. (see page 35).
In New York, the UST 10yr yield is slightly higher at 2.38%.
Oil prices are up and now over US$52 for the US benchmark, while the Brent benchmark is now over US$55 a barrel.
The gold price is marginally higher today by +US$3 to US$1,254/oz.
And the New Zealand dollar starts the week a little lower at 69.4 USc. On the cross rates the Kiwi dollar is unchanged at 92.4 AU¢ and against the euro is at 65.5 euro cents. The NZ TWI-5 index is just on 74.8.
If you want to catch up with all the 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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