China's C/A surplus slumps; China bets big on solar; Moody's doubts Aussie growth assumptions; VIX at record low; Canada's house building surges; UST 10yr yield up to 2.38%; oil and gold remain low; NZ$1 = 69.1 US¢, TWI-5 = 74.1

Here's my summary of the key events from overnight that affect New Zealand, with news markets show a distinct lack of 'fear'.

But firstly in China, their current account surplus narrowed sharply to just US$19 bln in the first quarter of 2017, down from $39 bln in the same period a year ago. The goods trade surplus was recorded at US$82 bln, while the service deficit came in at -US$60 bln. As a percentage of GDP that current account surplus is now well under 1%.

And staying in China, their drive to build solar energy capacity is gaining speed. Solar power generation rose to 21.4 bln kilowatt-hours in the three months ended March 31 from a year earlier. They added 7.21 gigawatts of solar power capacity during the period, boosting its total installed capacity to almost 85 gigawatts. For comparison, New Zealand's hydro system has about 25 gigawatts of capacity. (Manapouri's capacity, our largest, is 0.8 gigawatts.)

In Australia today, they will get their 2017-18 Budget. It is expected to show 'progress' towards balancing sometime in the distant future. But one ratings agency, Moody's, is already questioning the economic forecasts underpinning this plan.

In the US, equity markets are taking a breather, slipping off their highs. Despite all the economic uncertainties, Wall Streets 'fear index' is flirting with record low positioning. It has never been under '10' before but it looks like it will close today below that. It is said markets basically operate on 'fear and greed', and it is 'greed' that is having its heyday. But one thing is for certain, 'fear' will return.

In Canada, housing starts fell in April from March, although that is coming off a strong March result. Year on year they are actually up a very strong +13.5%. Canada is making very good progress in adding to its housing supply and tackling its excess demand issues that have rocketed up prices there.

In New York, the UST 10yr yield has risen again overnight to 2.38%.

The price of oil is up marginally, but remains well under US$50. The US crude benchmark is now under US$46.50 a barrel, while the Brent benchmark is under US$49.50.

It is the same story for gold, up just marginally at US$1,227/oz.

But the prices for commodities like copper and iron ore are still taking a beating. Iron ore is now down to just over US$60/tonne, and that is a -36% fall from its February high.

Surprisingly, the New Zealand dollar as a 'commodity currency' is not following that trend and is just a tad stronger this morning. The NZD is at 69.1 USc, 93.5 AU¢ and 63.2 euro cents. The TWI-5 index is back over 74 at 74.1.

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 ».