Bitcoin touches new record high

Kia ora,

Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the International edition from Interest.co.nz.

Today we lead with news the bitcoin price has hit a new all-time record high about two hours ago.

But first, US consumer inflation expectations are rising, for the year ahead at least. Consumer prices are now expected to be +5.7% higher in a year, but 'only ' +4.1% higher in three years.

While most analysts see the American economy growing at close to a +5% rate in Q4-2021, the data seems to be pointing to a much better result.

Meanwhile, there was a US Treasury 3yr bond auction today with US$163 bln offered where the Fed took a massive US$32 bln (compared to just US$4 bln at the previous event). Still the balance was well supported. The resulting median yield was 0.69% pa, up from 0.60% at the prior event a month ago.

Although they slipped slightly from September, Taiwan's exports grew strongly again in October, with the fastest rises being with the US and EU. However, exports to mainland China still dominate their trade even if the growth across the Taiwan Strait is tailing off. Taiwan's import growth is dominated by oil.

In China, all eyes are on the CCP's big event in Beijing. But concerns are growing over their Delta spread, and the property developer bond default situations still linger. Industry activity is slowing, in fact fast enough for the iron ore price to fall faster, now that order volumes are falling too.

In Australia, new data shows that their rooftop solar installations now exceed 3 mln delivering almost 16 gigawatts of capacity. Solar-sourced electricity now accounts for 38% of demand on their national electricity market. Electricity prices are staying high and driving this demand, because ageing coal-fired plants are being removed from their electricity networks.

The UST 10yr yield opens today at 1.50% and up +4 bps since this time yesterday. 

The price of gold will start today at US$1824/oz and another +US$6 rise from this time yesterday and a two month high.

And oil prices are firmer too at just on US$81/bbl in the US, while the international Brent price is now just on US$83/bbl. Both represent about a +US$1 gain.

The Kiwi dollar opens today +½c firmer at just over 71.7 US. Against the Australian dollar we are also firmer at 96.5 AUc. Against the euro we are up to 61.9 euro cents. That means our TWI-5 starts today at just on 75.4 and equaling a four year high.

The bitcoin price has risen sharply overnight, and now at a record high US$66,052 and a +6.3% jump. Volatility over the past 24 hours has also been high at just over +/-3.6%.

You can find links to the articles mentioned today in our show notes.

And get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.