Weekend briefing; Storm in global markets intensifies, few spared

Here’s our roundup of the major overnight economic events affecting New Zealand, along with financial market news.extreme fear‘ as they face mounting losses on stocks and bonds. The US dollar pushes even higher and ferociously spreads financial problems to emerging economies. The NZD plunged.

UK tax cuts have collapses the British currency.

Commodity prices are falling.

But surprisingly, through all this turmoil which is compounding the pain of Ukraine’s invasion, all EU countries and leaders remain united in confronting Russian threats and challenges – with the almost sole exception of Hungary. . It seems they are united to bear the pain that will come with winter. Putin had counted on a fracture, but that does not happen. Given the EU’s penchant for disagreements and slights, this is an impressive show of solidarity. But all this could also be threatened by the rise of fascist parties in Italy, where elections are taking place this weekend.

First, there were a few early PMIs overnight. the american reported private sector production fell at a slower pace as new orders returned to growth in September. Their manufacturing sector grew in September, but not their services sector, although the contraction was very minor.

Canada reported retail sales activity for July overnight and it was not positive with both monthly declines (their first in seven months) and year-over-year retreats.

In China, home loan interest rates have fallen to record lows in at least 80 major Chinese cities as financial regulators scramble to keep the property market afloat. In September, more than 80% of the 103 key cities interrogates show that first home lending rates fell to 4.1%, while second home lending rates fell to 4.9%.

Singapore Annual inflation has increased to 7.5% in August, which was higher than the 7.2% expected by analysts, and higher than the 7.0% they had in July. Generally, ASEAN inflation is something to watch, and the rising US dollar won’t help. Malaysian inflation is on the rise and stands at 4.7%. Indonesia is also at 4.7%. Thailand is at 7.9%.

Taiwan’s inflation rate is low (like China’s) and currently stands at 2.8%. But their retail sales activity increased by +12% compared to a year ago, and their industrial production reached record levels.

The first Eurozone PMI for September reported a steeper decline as price pressures intensified. Their factory and service sectors are contracting this month, but the quantum is quite low at this point. The negative impacts are strongest in Germany. French activity is positive and contributes to maintaining the overall results.

Early Australian PMI indices show that their manufacturing sector is growing at a good pace in September and faster than in August. But their service sector is not the image of this, more or less trampling.

But much of Australia is exposed to mining and commodity prices are falling. Today, the rating company Moody’s has changed his outlook for the global metals and mining industry from stable to negative as a global economic slowdown continues to dampen demand.

The UST 10-year yield starts today at 3.70% and is unchanged from the same time yesterday, but at one point it hit 3.81%. But even at current levels, it’s still at its highest since 2010. A week ago it was at 3.46%, so it’s up +24bps since then. The UST 2-10 yield curve is more inverted at -41 bps. But their 1-5 curve is much less inverted at -17 bps. And their 30-day-10-year curve flattened to +105 basis points. Australia’s 10-year bond is higher, up +6 basis points to 3.91%. The ten-year Chinese government bond is up +2 basis points to 2.71%. And the New Zealand 10-year government will start today at 4.16%, up +16 basis points from the same time yesterday.

At the close of yesterday’s session, local swap rates climbed higher again.

In Friday’s trading on Wall Street, the S&P500 fell another -2.0% as the revaluation of stocks continues. This means that it is down -4.4% over the week and -23% since the peak at the start of the year. The drop of -1120 pts since this peak is its biggest drop in history, surpassing the drop of -1077 pt at the start of the pandemic and the drop of -716 pt in the GFC. European overnight markets all closed another -2%. London fell -3.6% over the week, Frankfurt fell -3.2% over the week and Paris fell -4.4%. Yesterday, Tokyo ended down -0.6% to be down -2.6% for the week, Hong Kong closed down -1.2% and down -4.1% for the week. week, and Shanghai closed down -0.7% for a weekly decline of -1.1%. The ASX200 was down -1.9% on Friday for a weekly retreat of -3.9%. The NZX50 was not spared, ending down -0.7% on the day to fall almost -1.4% on the week. The NZX50 was the least worst of all stock markets, a dubious distinction for investors.

The price of gold will open today at US$1642/oz. This is down -30 USD from the same time yesterday.

And oil prices start today very sharply lower -4.50$ from yesterday to just under 79$/bbl in the United States, while the international price of Brent is now just in below US$84.50/bbl. These are eight-month lows.

The Kiwi Dollar will open today just at 57.4 USc and more than -1 lower than yesterday at this time. It’s its lowest since briefly in the early days of the first pandemic lockdown, and before that 13 years ago. Against the Australian dollar, we are slightly firmer at just AUc 88.1 and still close to its seven-year low. Against the euro, we are changing little at 59.3 euro cents. Against the yuan, we fell to ¥4.1 and its lowest since 2015 (barring the pandemic). All of this means that our TWI-5 starts today at 67.9, and drops -50 basis points in one day and also to seven (also excluding the pandemic). ).

Bitcoin price is now at US$18,753 and is down -1.7% from the same time yesterday. It has been below US$20,000 for six consecutive days. A week ago it was at US$19,606. Volatility over the past 24 hours has been subdued at just +/- 2.6%.

The easiest place to keep up to date with the risks of events today is to follow our economic calendar here.”

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