Here's our summary of key events overnight that affect New Zealand, with news American investor enthusiasm is fading, but Chinese investors are cock-a-hoop.
Firstly, in the US underlying producer prices increased solidly for a second straight month in May, boosted by a surge in the cost of services. Overall, final demand producer prices were up +1.8% in the year to May, but up +2.3% excluding food and oil. Eyes are turning to tomorrow's US CPI result for May. Markets are expecting a tad less than 2%.
Wall Street started positively today but as the session developed all those gains evaporated and it is about even now. More companies are reporting earnings trouble from the Trump tariffs. European markets ended much more positively, up about +0.7%.
Asian equity markets ended up very positively yesterday. Tokyo was up +0.3%, Hong Kong was up a strong +0.8% on top of the prior day's spectacular gain. And Shanghai topped all that, up an impressive +2.6%. Rumours swept markets there that Beijing is about to unveil expanded fiscal stimulus measures to lean against growing external trade weakness that has seen local consumers turn risk averse. Some analysts believe China could deliver 2 trillion yuan (NZ$440 bln) worth of cuts in taxes and fees, and allow local governments to issue another 2 trillion yuan in special bonds largely used to fund key projects. That's a level of new juice which excited their stock market.
The OECD is reporting that growth momentum has evaporated in some key countries, including the United States, Japan, Canada and the euro area as a whole, including Germany and Italy. The downturn in the leading indicators for the US is quite striking - but clearly this hasn't hit them yet.
And the US President renewed his Twitter attack on the US Fed overnight, bizarrely arguing that they should set policy to artificially manipulate the US dollar lower. His Treasury Secretary also recently argued that the Chinese should be manipulating their currency more to not fall against the US dollar. American complaints about currency manipulation by others have now been completely undermined.
China is starting to ration its exports of rare earth minerals. May exports fell -16% and it is likely that June's level will be much lower.
In Australia, mortgage brokers there are fighting to stay exempt from the obligation to act in their clients best interests.
And the widely-watched NAB business survey for May has come in with a very healthy improvement after the less-than-stellar dip in April. But it is not all it seems. Yes, sentiment improved but business conditions measured in the survey slipped yet again.
The UST 10yr yield is holding and now just on 2.15%. Their 2-10 curve is little-changed at +22 bps and their negative 1-5 curve is now at -14 bps. The Aussie Govt 10yr is at 1.46% and down -2 bps. The China Govt 10yr is up +2 bps to 3.29%, while the NZ Govt 10 yr is down -1 bp, now at 1.76%.
Gold is little-changed today, now just on US$1,327/oz.
US oil prices are also little-changed. They are still just under US$53.50/bbl. The Brent benchmark is still at US$62.50/bbl.
The Kiwi dollar has stepped back a little again this morning and is now at 65.9 USc. On the cross rates we are softer too at 94.6 AUc. Against the euro we are down to 58.1 euro cents. That eases the TWI-5 down to 70.5.
Bitcoin is down marginally, today at US$7,898. The bitcoin 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 ».