Earnings reports from Walmart and Target show that retailers can't raise prices fast enough to maintain margins and earnings are taking a hit.
US mortgage applications were down a sharpish -11% last week but at least their mortgage interest rates did not rise further.
American housing starts remain high but in a rut principally due to supply chain inhibitions because completion levels aren't rising. Building permit approvals remain at historically high levels.
The US Treasury ran another bond tender, this time for their 20 year bond and it was very well supported. Despite the demand, the median yield rose to 3.22% at this even, well above the 3.03% at the prior equivalent event a month ago.
Average new home prices in China's 70 major cities rose by just +0.7% in the year to April, slipping from a timid +1.5% gain a month earlier. But 50 of those 70 cities recorded house price falls from the prior month, 4 recorded no change, and of the 16 that recorded a gain, none exceeded +1%. Shanghai recorded no change, presumably because it was locked down. This was the weakest rise in new home prices since October 2015, as Beijing's deleveraging campaign triggered a liquidity crisis in some major property developers.
In all of Shanghai, population 25 mln (in a greater metro region of 41 mln people), their car dealers sold zero new cars in April. Not even one. But because they order in advance, they still had to buy inventory. It must be tough.
A senior Chinese central banker is "being investigated" for suspected leaking of official economic statistics, after Beijing criticised the central bank for not adequately aligning itself with the party. There is no comeback for him now. The Central Commission for Discipline Inspection said that Sun Guofeng, who was until earlier this month head of the monetary-policy department, is being investigated for “suspected serious violation of laws and discipline.” It didn’t disclose any specifics but it earlier issued a report saying "the building of financial regulations is relatively sluggish" and blames the bank for not meeting President Xi's targets for "promoting deepening financial reform".
Australian wages rose +2.4% in the year to March, marginally better than the +2.3% in the year to December, but not as strong as expected (+2.5%). Even the q-on-q was a tad disappointing (annualised +2.8%), and this won't really bolster the RBA's case for a quicker return to 'normal' for monetary policy.
The UST 10yr yield will start today -8 bps lower at 2.89%. The UST 2-10 rate curve is flatter at +24 bps and their 1-5 curve is also flatter at +84 bps. Their 30 day-10yr curve is a tad steeper at +240 bps. The Australian ten year bond is now at 3.33% and down -11 bps. The China Govt ten year bond is down -2 bps at 2.82%. And the New Zealand Govt ten year is unchanged at 3.63%.
On Wall Street, the S&P500 could not hold yesterday's gain and is down a very sharp -4% in Wednesday afternoon trade. Overnight, European markets were all down about -1.3% except London which down -1.1%. Yesterday, Tokyo ended up +0.9%, Hong Kong ended up +0.2% but Shanghai fell -0.3%. The ASX200 ended its Wednesday session up +1.0% and the NZX50 ended up +1.1%. These new levels seem unlikely to hold today however.
The price of gold starts today down -US$2 since this time yesterday at US$1816/oz.
And oil prices are -US$3.50 lower today and now just over US$106.50/bbl in the US, while the international Brent price is now just over US$107.50/bbl.
The Kiwi dollar will open today almost -½c weaker against the US dollar, now at 63.2 USc. Against the Australian dollar we are little-changed at 90.5 AUc. Against the euro we are almost unchanged at 60.3 euro cents. That all means our TWI-5 starts today at 70.6 which is down -30 bps from this time yesterday.
The bitcoin price has fallen -3.5% from this time yesterday and is now at US$28,989. Volatility over the past 24 hours has been high at +/- 3.4%.
Source: Interest.co.nz
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