Here’s our summary of key economic events overnight that affect New Zealand, with news that as global price pressures ease, we may be starting to see a wage-price surge locally.

But first, the American housing market is continuing its measured rise with a surprise rise in February pending home sales. You may recall they rose more than +8% year-on-year in January, and analysts thought February would give back about -2.3% of that. But in fact they rose again, by +0.8%, and locking in the gains. It is the Northeast where the big gains are coming from; the West remains weak. It’s a recovery of transaction volume at this stage, not in prices, where the median remained at US$363,000 (NZ$583,000).

This gain in real estate volume may well have carried on into March. Mortgage applications rose +2.9% last week, a fourth consecutive week of increases, and the longest winning streak in four years. Mortgage interest rates were little-changed with the benchmark 30yr fixed rate at 6.45% plus points, but that is a one-month low.

Singapore reported that their producer prices are deflating fast now, down -4.7% in February on top of a -1.5% drop in January from the same month a year ago.

In Thailand, their central bank raised its policy rate by +25 bps to 1.75%. They are reporting a good recovery and a growing economy. Their rate increase is part of their ‘normalisation’ program.

Yet another survey reported that German consumer sentiment is improving, extending the trend to six consecutive months.

But in Russia, retail sales are sharply lower (-7.8%), as is industrial production (-1.7%). Both sets of data are worse in February than January.

Although it is not expected to have much impact on trade flows, the CPTPP eleven nation trade group is expected to agree that the UK can join. You may recall that both Taiwan and China have also applied, but they will be caught up in the global political rivalry. The CPTPP is the high-standard trade bloc promoted by the US Obama Administration, but was abandoned by the Trump Administration. However, even without the US it is doing an effective job raising trade deal standards especially labour and environmental standards. Even China’s preferred RCEP looks up to the CPTPP.

In Australia, their inflation rate is moderating, although it remains very high. Their CPI rose 6.8% in the year to February, easing from a 7.4% gain in the year to January. This was less than the 7.1% expected and was the second straight month of lower annual inflation and the softest pace since last June. The easing is largely due to slower rises in prices of housing, food, and transport. Financial markets were pricing virtually no change to the RBA cash rate at next week’s review, and may be vindicated by this CPI update. But ANZ says it thinks the RBA will hike by +25 bps again next week because inflation is “still too high”. New Zealand won’t get its March CPI update until April 20.

But whether Aussie inflation continues to moderate is still up in the air. Their unions seem ready to push for big +7% wage claims in cost-of-living campaigns at both state and national levels, and in both the public and private sectors.

Tallies of funding activity in international financial markets shows that Australian banks are having no problems raising money. All recent issues (especially by ANZ, CBA and NAB) have been heavily over-subscribed, enabling them to have raised most of their 2023 requirements already. International investors seem to prize Aussie banks for their “unquestionably strong” capital benchmarks.

The UST 10yr yield starts today at 3.56%, up +2 bps from yesterday. The UST 2-10 rate curve is little-changed at -51 bps. Their 1-5 curve inversion is unchanged -89 bps. And their 30 day-10yr curve is only marginally more inverted at -58 bps. The Australian ten year bond is down -2 bps at 3.33%. The China Govt ten year bond is unchanged at 2.88%. And the New Zealand Govt ten year is starting today up at 4.19%. That is a +7 bps rise.

Wall Street is on the up, with the S&P500 tracking a +1.0% rise in late Wednesday trade. Overnight, European markets were equally positive and up +1.2% across the board. Yesterday Tokyo ended its Wednesday session up +1.3%. Hong Kong was up +2.1%, but Shanghai ended down another -0.2%. The ASX200 ended up a minor +0.2%, but the NZX50 fell -0.3% in its Wednesday trade although that was after a late recovery.

The price of gold will open today at US$1965/oz and down -US$5 from this time yesterday.

And oil prices start today unchanged from yesterday at just over US$73.50/bbl in the US. The international Brent price is now just on US$78/bbl. 

The Kiwi dollar is down -¼c against the USD and now at 62.2 USc. Against the Aussie we are little-changed at 93.1 AUc. Against the euro we are also little-changed at 57.5 euro cents. That means the TWI-5 is now at 70.2 with a minor -10 bps daily dip.

The bitcoin price is much higher today, now at US$28,246 and up +5.0% from this time yesterday. Volatility over the past 24 hours has been high too at +/-3.5%. 

The easiest place to stay up with event risk today is by following our Economic Calendar here ».