Here's our summary of key economic events overnight that affect Australia, with news Wall Street is ending its week with tech weakness dominating in equity markets, and Fed speaker comments (here and here) pushing long benchmark bond yields higher. The USD is soft and down nearly -1% for the week. Silver is retreating today although gold is up near its record high.
Canadian building consents surprised analysts with quite a surge in October, especially residential consents for multi-unit buildings in Toronto. That drove an outsized +15% national gain from September to be +19% higher than a year ago. On an annual basis, residential consents are also up +19% with Ontario up more than +28%.
In China, new loan demand remains unusually weak, and in November came in even lower than the weak forecasts by observers. Chinese banks extended ¥390 bln in new yuan loans, up from the unusually low October level but still below both last year’s weak ¥580 bln and market expectations of ¥500 bln. Soft household demand continues to weigh on stimulus efforts. Remember, over the past five years, this loan demand has averaged ¥830 bln in a November month so the current drag is notable.
And it is looking increasingly like investors, including boardroom directors in charge of making capital expenditure decisions, have goner on a quiet strike in China.
India's CPI inflation remains very low at +0.7% in November from a year ago, up from its record low level in October. This was driven by an almost -4% fall in food prices.
India's bank loan growth is back up +11.5% from a year ago and its fastest expansion this year.
In Malaysia, both their retail sales (+7.2% year-on-year) and their industrial production (+6.0%) expanded at an accelerating pace in October data released overnight.
In Japan, it is becoming clear (from company financial reporting) that the Trump tariffs on Japanese exports have backfired. Japanese companies raised their prices after the initial tariff hit, the Americans paid the higher prices, and when Washington backed away from some of the more extreme levels after negotiation, those hiked prices didn't retreat. They stayed up and boosted Japanese company profits. The picture was probably similar elsewhere. The ultimate losers have been the American buyers. American reshoring has been weak, so much so that one Fed member is now more worried about jobs than inflation.
The UST 10yr yield is now at 4.20%, up +8 bps from this time yesterday, up +6 bps from this time last week. The key 2-10 yield curve is now at +65 bps. Their 1-5 curve is still positive by +21 bps and the 3 mth-10yr curve is positive by +53 bps. So all the moves up are at the long end. The China 10 year bond rate is up +1 bp at 1.85%. The Japanese 10 year bond yield is up +2 bps at 1.95%. The Australian 10 year bond yield starts today at 4.76%, up +6 bps from yesterday, up +5 bps for the week.
Wall Street has ended its Friday with the S&P500 down -1.1%, and overwhelming the dip-buyers. It has had a -0.8% weekly pullback. Overnight, European markets were negative between London's -0.6% fall and Paris's -0.2% dip. Yesterday, Tokyo ended its Friday trade up +1.4% for a weekly +0.4% gain. Hong Kong was up +1.7% for a weekly -0.4% dip, and Shanghai rose +0.4% yesterday to end its week down -0.5%. Singapore was up +1.5%, an unusually strong rise for them. The ASX200 ended its Friday with a +1.2% rise for a similar weekly gain.
The Fear & Greed index has remained just in the 'fear' zone and little-changed from last week.
The price of gold will start today at US$4294/oz, and up +US$21 from yesterday, up +US$79 from a week ago and back near its mid-October peak. And we should note that silver has fallen -US$2 today to just under US$62/oz.
American oil prices are +50 USc firmer at just under US$57.50/bbl, while the international Brent price is just under US$61.50/bbl. Both are -US$2.50 lower than a week ago. Separately, it is very noticeable that the North American rig counts are still languishing near their four year lows. No-one is rushing to invest as prices and demand stay very low.
The Australian dollar is -10 bps softer from yesterday, now at just under 66.6 USc. But it is up +20 bps from a week ago. Against the Japanese yen we are down -10 bps at ¥103.7. Against the euro we are down -10 bps at 55.7 euro cents.
The bitcoin price starts today at US$90,264 and up +0.3% from this time yesterday, and up +1.6% from last week. Volatility over the past 24 hours has been moderate, at just on +/- 2.0%.
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