Here's our summary of key events overnight that affect New Zealand, with news central bank signals suggest more stimulus is on the way.
But first up today, there has been another negative dairy auction, the third in a row. Prices dropped -3.8% today in USD terms and -2.5% in NZD terms. Whole milk powder prices are down -4.3%, butter down -5.7%. Today's event takes overall prices back to where they were in February. This auction cement's in more than an -8% fall since early May and will not help holding the farmgate milk payout forecasts.
US housing starts in May have come in -4.7% lower than for May 2018. Building permits are down on a year-on-year basis as well.
Updated April data shows that China, and most other countries, decreased their holdings of US Treasury securities.
Canada manufacturing sales fell unexpectedly in May.
In China, the May data for house price levels show them rising at a sustained clip, up more than +10% pa in many major cities.
And in the Philippines, anti-China sentiment has flared, triggered by their Government's weak response to China's encroachment claims in the South China Sea.
A closely-watched German survey of business opinion, the ZEW survey, fell sharply in June.
And that may be one reason the ECB boss signaled that the central bank could roll out fresh stimulus as soon as July, sending the euro lower. Essentially, this reinforces the fear of the European economy slipping back into recession. It also brought a rebuke from the American President.
Meanwhile there are reports circulating that Trump is considering removing Jay Powell as the chairman of the Fed.
In the trade front, an 'extended meeting' between the Chinese and US presidents has been confirmed at the Japanese-hosted G20 summit later this month. The Chinese say they are keen to communicate 'fundamental issues' to the Americans.
Equity markets like the prospect, and the S&P500 is up +1.1% so far today. European markets were up even more overnight. Markets also like the prospect of more central bank stimulus.
Facebook has announced it will take on the global financial system by creating a cryptocurrency called Libra, a payments system powered by blockchain and a digital wallet. All this is part of a plan to move into lending. It is likely to run into substantial regulatory opposition.
In Australia, yesterday's release of the RBA minutes shows they think wage and inflation growth there is still some way off and further rate cuts will be needed to stimulate their economy and jobs. Analysts now see their 1.25% policy rate cut aggressively over the next few months and could go as low as 0.75% by the end of the year.
The UST 10yr yield is now under 2.06% and down -3 bps from yesterday. Their 2-10 curve is slightly narrower at +19 bps while their negative 1-5 curve is wider at -25 bps. Their closely-watched 30 day-10yr yield is sharply negative now at -13 bps. The Aussie Govt 10yr is down -3 bps at 1.36%. The China Govt 10yr is down -1 bp to 3.26%, while the NZ Govt 10 yr is down -2 bps to 1.65%.
Gold is up +US$8 today at US$1,346/oz.
US oil prices are +US$2 higher today, boosted by hopes on the trade front. They are now just on US$54/bbl. The Brent benchmark is now at US$62.
The Kiwi dollar is firm against the greenback at 65.2 USc. On the cross rates we have risen slightly too to be at 95 AUc. Against the euro we are up to 58.3 euro cents. That puts the TWI-5 up at 70.3.
Bitcoin off yesterday's highs overnight, down -2.5% to US$9,036. 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 ».
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