US expansion points to more rate hikes; Japanese inflation eases as economy expands; Singapore struggles; EU up but worries about banks grow; UST 10yr 3.37%; gold and oil down; NZ$1 = 62 USc; TWI-5 = 70.1

Here's our summary of key economic events overnight that affect New Zealand, with news markets are increasingly worried about Deutsche Bank. It has been eyed for years over some long-standing shady practices often with Russia, but now, post-Credit Suisse, confidence is leaking away to a serious extent.

But first, American durable goods orders fell -1% in February from January, to be just +1.0% ahead of year-ago levels. Mainly this was because of weak aircraft orders which have been a drag for a few months now. Orders capital goods were up +3.8% if you exclude defense and aircraft orders. Including both, capital goods orders were down -4% from year-ago levels.

But perhaps the March data will be better? The latest PMIs for March are healthy in the US. The flash Markit PMI for March reports the fastest uptick in US private sector business activity for almost a year, as new orders returned to growth. Their services sector expanded faster in March, and their factory sector's February contraction was almost eliminated in March. There is nothing in this report to indicate the US labour market is pulling back, but there are indications that price inflation remains high. This will steel the US Fed for an even higher benchmark interest rate to try any take more steam out of the expansion. Certainly that was the view of Fed hawk James Bullard overnight.

Canadian retail sales grew more than expected in January from December, but the year-on-year situation sagged somewhat to be +5.0% higher. It was healthy car-buying that helped the January data.

The Japanese inflation rate fell to 3.3% in February from January's 41-year high of 4.3%. The latest figure also marked the lowest print since last September. They had serious and sudden deflation in February from January, running at an annualised -7% rate.

The inflation fall came even as the Japanese services sector expanded at a faster rate in March. And their factory sector held it own, even if it isn't back expanding yet.

As the Brazilian president visits Beijing this weekend, China has agreed to restart beef imports after trade was initially halted due to a case of mad cow disease a month ago.

Singapore reported some awful industrial production data for February, far weaker than anyone saw coming. The contraction is running more than -11%

Eurozone economic growth accelerated to a ten-month high in March according to the latest flash PMI survey data, adding to signs that their economy is reviving after falling into decline late last year. Inflationary pressures have continued to moderate, with input prices even falling sharply in manufacturing. Jobs growth has also accelerated and business confidence in the outlook has remained resilient despite concerns stemming from recent banking sector stress and higher borrowing costs. Having noted all those positives, the overall rate of expansion is still quite modest.

These gains are all very fragile however given the growing concerns about the health of the European banking sector. Eyes are now on Deutsche Bank. On March 9, its share price was €11.51. It ended on Friday at €8.54. Shareholders are nursing a -25% dive in just two weeks on growing speculation the giant German bank could be following Credit Suisse's deadly path. It has wide-ranging issues. When confidence in a bank goes, it can go suddenly. The German Government is scrambling to reassure the market. But the odour is affecting many other banks as well.

In Australia, it's election day in NSW.

Locally, it looks like the TAB is in the last stages of being sold off to one of the Aussie betting giants. They will get access to the TAB's monopoly position here, unless the law is changed. Tabcorp and Entain are being talked about as the final bidders.

The UST 10yr yield starts today at 3.37% and down another -7 bps from this time yesterday, and back to early February levels. A week ago this rate was 3.40%, so only a -3 bps slip since then. The UST 2-10 rate curve is lower at -40 bps. Their 1-5 curve inversion is less inverted at just under -92 bps. But their 30 day-10yr curve is much more inverted at +85 bps. The Australian ten year bond is down -7 bps at 3.29%. The China Govt ten year bond is unchanged at 2.89%. And the New Zealand Govt ten year is starting today down -5 bps at 4.17%. That is a large -25 bps fall in a week.

Wall Street has opened its Friday trade with the S&P500 up +0.6% in late trade and heading for a weekly rise of +1.4%. Overnight, European markets fell by about -1.5%. Yesterday Tokyo slipped -0.1% to end the week up +0.6%. Hong Kong fell -0.7% on the day but ended its week up a strong +2.9%. Shanghai fell -0.6% in Friday trade to end the week up +0.4$. The ASX200 ended its final session down -0.2% on the day and down -0.6% for the week. The NZX50 was little-changed on the day but couldn't avoid a -1.2% weekly fall.

The price of gold will open today at US$1977/oz and down -US$18 from this time yesterday. A week ago the gold price was US$1975/oz, so very little net change here.

And oil prices start today -US$1 softer from yesterday at just over US$69/bbl in the US. The international Brent price is now just over US$74.50/bbl. At these levels we are up +US$2 in a week.

The Kiwi dollar is down almost -1c against the USD and now at 62 USc. A week ago it was at 62.7 USc. Against the Aussie we are little-changed at 93.4 AUc. Against the euro we are also little-changed at 57.6 euro cents. That puts the TWI-5 down -50 bps at 70.1, which compares with the week-ago level of 70.9.

The bitcoin price is lower again today, now at US$27,705 and down -2.9% from this time yesterday. But it is up +4.4% from a week ago. Volatility over the past 24 hours has been modest at +/-1.8%.

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