Tuesday, May 24, 2022

𝗨𝗦 𝗺𝗼𝘃𝗶𝗻𝗴 𝘁𝗼 𝗮 𝘀𝗹𝗼𝘄𝗲𝗿 𝗴𝗿𝗼𝘄𝘁𝗵 𝗺𝗼𝗱𝗲; 𝗨𝗦𝗧 𝟭𝟬𝘆𝗿 𝟮.𝟳𝟲%; 𝗴𝗼𝗹𝗱 𝘂𝗽 𝗮𝗻𝗱 𝗼𝗶𝗹 𝘀𝘁𝗮𝗯𝗹𝗲; 𝗡𝗭$𝟭 = 𝟲𝟰.𝟱 𝗨𝗦𝗰; 𝗧𝗪𝗜-𝟱 = 𝟳𝟭.𝟯

US factories are expanding less quickly. And their services sector's expansion is slowing too. However, both are still expanding at quite good levels.

That slowdown is also noticeable in the latest Richmond Fed factory survey for May. That same survey showed cost pressures hit a record high.

New home sales in the US actually slumped in April. This was quite a big miss, the level of retreat quite unexpected.

The good year-on-year gains in retail sales also look like they are coming to an end.

There was another very well supported US Treasury auction for their 2 year bond. But investors are now prepared to offer lower yields as the general theme of risk aversion grows. This time the median yield was 2.45%, down from the 2.53% yield achieved a month ago at the prior equivalent event.

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The UST 10yr yield will start today at 2.76% and down -12 bps. The UST 2-10 rate curve has steepened to +27 bps and their 1-5 curve is flatter at +75 bps. Their 30 day-10yr curve is also flatter at +222 bps. The Australian ten year bond is now at 3.24% and down -8 bps. The China Govt ten year bond is marginally softer at 2.81%. And the New Zealand Govt ten year is down +3 bps at 3.49%.

Wall Street has resumed its repricing lower and the S&P500 is down -1.4% in late Tuesday trade today. Tech stocks are taking a battering with the NASDAQ down -2.8%. Overnight, European markets were all down about -1.7% except London which fell only -0.4%. Yesterday, Tokyo was down -0.9%, but Hong Kong fell -1.8%. Shanghai closed down -2.4% with a late fade. The ASX200 ended its Tuesday session down -0.3%, while the NZX50 fell -0.6% on the day.

The price of gold is quite a bit firmer today, up +US$13 since this time yesterday at US$1865/oz.

And oil prices are virtually unchanged today and now just under US$109.50/bbl in the US, while the international Brent price is up about +US$1 at just under US$111.50/bbl.

The Kiwi dollar will open today little-changed against the US dollar, now at 64.5 USc. Against the Australian dollar we are also little-changed at 91 AUc. Against the euro we are soft at 60.1 euro cents. That all means our TWI-5 starts today at 71.3 which is down -20 bps from this time yesterday.

The bitcoin price has fallen -2.8% from this time yesterday and is now at US$29,301. Volatility over the past 24 hours has been moderate at +/- 2.6%.

Source: Interest .co .nz


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