Here's our summary of key events overnight that affect New Zealand, with news of possible agreement on the NAFTA front.
The United States says it and Mexico agreed earlier today to a revision of the free trade agreement. Mexico however says it is still just an 'understanding' with still one issue yet to be resolved for them, without identifying it. Mexico seems to have done well in this revision however, one that will see a resurgence of manufacturing on its side of the border. The Mexican currency rose on the news; the US dollar slipped. The US has managed to weaken the other party's rights when there is a dispute. But that now puts pressure on Canada to come to terms an many unresolved issues, but especially on car manufacturing, to remain part of the three-nation pact.
In Germany, there has been a surprise improvement in their business sentiment. It jumped in August with more firms seeing their immediate future prospects brighten.
In Turkey, after a week of relative calm, the Turkish lira has started falling heavily again.
Brazil has posted a big trade deficit in July, after four consecutive monthly surpluses, due mainly to fast-rising interest payments.
In Malaysia, they have made an about-turn on a huge US$100 bln new city development that targets Chinese residents. They will no longer allow foreign ownership nor give visas to foreigners to live there. The change imperils the whole project. This change comes after Malaysia pulled back of some other Chinese-backed Belt & Road projects, saying they trapped Malaysia into unsustainable debt.
In China, new data shows large firm industrial profits up +17.1% in the first seven months of 2018 compared to the same period a year ago. Strong performances like this bolster the idea that China may find a way to avoid much of the tariff pain coming their way from the US.
In Tokyo, the world's first driverless taxi service has started operating on public roads, a trial that is expected to be completed and rolled out ready for the 2020 Olympics.
The UST 10yr is up +3 bps at 2.85% and the 2-10 curve is at +20 bps. The San Francisco Fed is pointing out the recession risk of the narrowing of this curve. They doubt the 'this-time-is-different' theories surfacing in some quarters. The Aussie Govt 10yr is at 2.54% (unchanged), the China Govt 10yr is at 3.65%, up +1 bp, while the NZ Govt 10 yr is at 2.61%, also up +1 bp.
Gold is slightly firmer again, this time by +US$4 from yesterday and is now just on US$1,209/oz in New York.
US oil prices are firmer today too, now almost at US$69/bbl. And the Brent benchmark is well over US$76/bbl.
The Kiwi dollar is also a little firmer at 67 USc. On the cross rates we are now at 91.1 AUc, and at 57.3 euro cents. That keeps the TWI-5 at 70.5 and comfortably above its recent three year lows.
Bitcoin is at US$6,729 and +1.0% higher than this time yesterday. And for the third day in a row it is above NZ$10,000.
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