Here's our summary of key events overnight that affect New Zealand, with news economic growth is healthy worldwide.
But first up today, the latest dairy auction has brought a good gain of +2.7% overall in USD although the strengthened Kiwi dollar has limited the upside in local currency to +1.5%. WMP prices also only gained less than +1% and that also restrained the overall outcome. But there was a good bounce back for cheese which rose +4.6% and also SMP which rose +3.6%. In fact, butter prices, which rose just a bit less than +3% are now at a six month high. And despite the minor gain for WMP, the new price level is an eleven month high. Volumes sold were a modest 19,262 tonnes, but that is the highest in four auction events. It is unlikely any payout forecasts will be changed by today's auction, but they aren't under threat from it either.
In the US, new housing starts in March have come in much stronger than expected and are up +10.9% above the same month a year ago. Building permits issued were up +7.5% on the same basis. The real strength is in multi-unit developments; single family home starts were up only +1.7%.
And in American factories, industrial production was up +4.3% in March from a year ago although the growth rate slowed to less than half that from February. Capacity utilisation however did pick up.
China announced its economic growth rate was +6.8% pa in the quarter ending in March, exactly on market expectations and exactly the same as Q4-17. They also said their retail sales grew +10.1% and that follows a rare two months that were sub +10%.
Around the world, economic growth is rising. The IMF reports the global economic upswing that began around mid-2016 has become broader and stronger. They say advanced economies as a group will continue to expand above their potential growth rates this year and next before decelerating, while growth in emerging market and developing economies will also rise before leveling off. 2018 growth will be a seven year high, they say. Of course, they also give their obligatory warning about "troubles ahead in the future".
Led by tech stocks, Wall Street is strongly higher today with all major indexes up by much more than +1%.
China announced a new 'reform' allowing foreign carmakers to set up in the country without a local shareholding. It also removed foreign ownership limits for ship and aircraft manufacturing. But China's Commerce Ministry ordered importers of American sorghum to post bonds to pay possible anti-dumping duties which could be as high at 180%.
But China is not moving away from holding its foreign reserves in US Treasuries. They increased their holdings in February by +$8.5 bln, its biggest purchase in six months, taking them to US$1.18% tln or 18.7% of all foreign holdings and about 6% of all US Federal debt.
In Germany, the influential business confidence survey by ZEW is reporting a sharp fall in confidence, triggered by the inhibiting of German trade with Russia after the West's reaction to the Syria chemical warfare attack.
In Australia, revelations at their Royal Commission into Financial Services is exposing some very dodgy behaviour in the current investigation of AMP. There are likely to be some long-term consequences for the whole industry, and much tougher penalties as a result.
The UST 10yr yield is slipping today and now at 2.81% (-2 bps). The US 2-10 rate curve is moving lower again. The Chinese 10yr is at 3.68% (-4 bps) while the New Zealand equivalent is at 2.85% (unchanged).
Gold is at US$1,347/oz in New York, and unchanged.
Oil prices are slightly firmer today and now just over US$66.50/bbl and the Brent benchmark just over US$71.50/bbl.
The Kiwi dollar is still unchanged this morning at 73.4 USc. On the cross rates we are at 94.4 AUc and 59.4 euro cents. That puts the TWI-5 at 74.4, still anchored near the top of its 2018 range.
Bitcoin is now at US$7,870 which is a -1.8% slip from this time yesterday.
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The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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