Here's my summary of the key events overnight that affect New Zealand, with news that the data is giving different signals to the news narratives.
But first, this morning's dairy auction was not as strong as the derivatives market expected. But there are gains. Overall, prices are up +3.1% in USD terms, up +2.2% in NZ dollar terms. The key WMP price is up a disappointing +3.5%. However, it is now three small but steady rises in a row, making back all of the -6.4% fall on March 7. Today's result won't be changing any forecasts one way or the other, although some futures market traders might be nursing some bruises. Still, things are very much better than they were a year ago when we were deep in a hole. Today's prices represent more than a +50% increase over that low period.
The IMF has released an upbeat report on the global economy, despite the obvious challenges. The world economy seems to be gaining momentum, they say. Their chief economists said "we could be at a turning point" to go higher (p xiv). The report forecasts global growth this year of +3.5%, up from +3.1% predicted for 2017 last year. They reckon the acceleration will be broad based across advanced, emerging, and low-income economies, building on gains we have seen in both manufacturing and trade. Their assessment seems to be consistent with the data we have seen over the past six months, but has been obscured by the unusually strident political narratives swirling around the world. Perhaps we should watch the data, rather than get caught up in social media 'views'.
In the US, house building fell more than expected in March as the construction of single-family homes in the Midwest recorded its biggest decline in three years. However a healthy rise in building permits suggests this is a one-off and their housing market recovery remains on track.
First quarter earings data was also released today in the US and that showed healthy gains. Median weekly earnings of America's 110 million full-time wage and salary workers were US$865 (NZ$1,235) in the first quarter of 2017. This was +4.2% higher than a year earlier, compared with a rise of +2.5% in their Consumer Price Index over the same period. Real wages and spending power both are rising, and more than you would think if you did not watch the data.
The Fed's review of industrial production and capacity utilisation was also positive.
Across the Atlantic, Britain is to have a snap election on June 8, designed to give their prime minister a stronger hand in the Brexit negotiations with the EU. There are few implications outside of strictly domestic rivalries.
In New York, the UST 10yr yield is sharply lower today and now at 2.17%.
Oil prices are down as well and now just over US$52.50 for the US benchmark, while the Brent benchmark is now just over US$55 a barrel.
The gold price however is unchanged at US$1,290/oz.
Tthe New Zealand dollar will also start pretty much unchanged at 70.3 USc. On the cross rates the Kiwi dollar is up at 93.1 AU¢ and against the euro we are still at 65.6 euro cents. The NZ TWI-5 index is now at 75.1.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».