Equities rise on trade deal hopes; US data weak; Mexico growth low; China blind to leverage; Australia unsold house inventory high; UST 10yr 2.68%; oil and gold down; NZ$1 = 68.8 USc; TWI-5 = 73.3

Here's our summary of key events overnight that affect New Zealand, with news that markets are up but the underlying data is not.

Wall Street is rising today on optimism a trade deal between China and the US is close. The US President is feeding that optimism. The S&P500 is up +0.4% in afternoon trade. This follows Shanghai yesterday that was up +5.6% and Hong Kong, up +0.5%. That Shanghai rise is eye-popping and since the start of 2019, their index is up a remarkable +20.1%. Remember however, that index dropped more than -25% in 2018 so even after today's big rise it is still -10% in the hole.

The final sticking points in the trade deal seem to be 'enforcement' mechanisms.

In the US, February car sales are expected to be about -1% lower than the same month a year ago.

US wholesale trade disappointed with sales levels in December up only +1.0% year on year, but giving up some of that gain from November. Further, wholesale inventories rose and at a quickening pace and are up +7.3% from December 2017. This is not a good sign.

Also weak is the National Activity Index monitored by the Chicago Fed. It showed most components weaker in January.

Bucking the trend on a regional basis, the overall Dallas Fed activity index was up even as new order data halved.

In Mexico, their economy slowed sharply in the fourth quarter of 2018 as a drop in industrial production largely cancelled out good gains in services and rural production. Full year 2018 growth was +2.0% with little contributed in the final quarter.

In China, in something of a double-take Kafka moment, their banking regulator is saying they have achieved their structural deleveraging targets.

In Australia, according to CoreLogic there are 115,000 houses currently listed for sale across the country, a level +15% higher than this time last year. But sale volumes are down -15% nationwide, but that figure increase to more than -20% in the big markets of Sydney and Melbourne.

And staying in Australia, their opposition Labor Party has said it will follow New Zealand and require real estate agents, accountants and lawyers to be subject to anti money laundering laws - if they win in the May general election.

The UST 10yr yield is at 2.68% and a rise of +3 bps. Their 2-10 curve has held at just under +17 bps. The Aussie Govt 10yr is up +1 bp to 2.11%, the China Govt 10yr is up +3 bps to 3.18%, while the NZ Govt 10 yr is down -3 bps at 2.18%.

Gold is a little softer, down -US$2 at US$1,326/oz.

US oil prices are sharply lower today, now just over US$55/bbl while the Brent benchmark is down to just under US$65/bbl.

The Kiwi dollar is starting today firmer at 68.8 US. On the cross rates we are holding at 96.1 AUc. Against the euro we are at 60.7 euro cents. That puts the TWI-5 up at 73.3.

The bitcoin price has risen this morning, up +1.2% to US$3,822.. This rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».