Bitcoin dives; US data decidedly soft; EU business sentiment falls; G20 rumours swirl; China profits shrink; China yuan sidelined; UST 10yr yield at 2.01%; oil and gold down; NZ$1 = 67 USc; TWI-5 = 71.5

Here's our summary of key events overnight that affect New Zealand, with news we can't escape the G20 meeting circus and the conflicting reports about the Xi-Trump negotiations.

But first up, it is the reverse story today. Bitcoin has dived from its giddy height, at one stage reaching US$13,879. Right now it is at US$10,752 and a dive of -US$3,127 or -23% - in just 24 hours. Easy-come, easy-go in the most speculative market going these days.

In the US, pending home sales bounced back somewhat in May, pretty much as expected, with a more than +1% rise since April, but they are still almost -1% lower than in May 2018. Things are even tighter in the West where sales are down more than -3% year-on-year.

We got another regional Fed factory survey overnight and that continued the trend of reporting a stall in growth. This condition is spreading widely now.

Not helping is that Boeing is being hamstrung by its giant 737 program, and that American car sales are weak.

And the final US March quarter GDP result was updated last night, only marginally lower than previously signaled at +3.1% growth which is strong. However, there is a little sting in these final numbers with the personal consumption component recording just +0.9% growth and far below the interim +1.3% that was estimated. This minor surprise is weighing on the US dollar today.

Also on the slide is European business sentiment.

Not helping will be that carmaker Ford has said it will cut about 12,000 jobs across its European operations by the end of 2020. They need to cut costs and restructure its European business, which is losing money.

German inflation is blipping up again. It was running at +2% in April but dropped to +1.4% in May. An overnight data release for June now pegs it at +1.6%.

All eyes are now on the G20 summit and the important Trump-Xi meeting. But the US president is now lashing out at everyone including allies, and that is having some interesting effects. One is that China and Japan are drawing closer. But keeping markets interested in the China-US relationship are reports that the US is pulling back on the threat of heavy new tariffs.

In China, industrial profits are still shrinking, continuing a trend that started in January.

Yesterday Asian markets ended with good gains. Shanghai was up +0.7%, Tokyo up +1.2% and Hong Kong was up a heady +1.4%. Europe didn't follow however, drifting lower everywhere except Frankfurt which posted a modest gain. On Wall Street so far, the S&P500 is following Shanghai, up +0.5% in late trade.

SWIFT has released data on the international acceptable of the Chinese yuan in international trade - and it is making vitually no progress. It is used in 1.2% of all trade transactions (if you count the eurozone as one block) and that is about the same level it was in 2016. This same data shows the euro making small gains, up to a 33% share, and surprisingly so is the greenback, now up to 46% share. It is those two, then also-rans. The NZ dollar is #13 at a 0.4% share.

The UST 10yr yield is slipping today and now at 2.01% and down by -4 bps. Their 2-10 curve is now at +27 bps and their negative 1-5 curve is at -18 bps. The Aussie Govt 10yr is at 1.34% and up +1 bp from yesterday. The China Govt 10yr is unchanged at 3.28%, while the NZ Govt 10 yr is up +6 bps to 1.63%.

Gold is lower today, down by -US$5 to US$1,406/oz.

US oil prices are marginally lower today. They are now just over US$59/bbl. The Brent benchmark is now at US$66.

The Kiwi dollar is still rising and across the board, and is now at 67 USc. On the cross rates we are firm at 95.7 AUc. Against the euro we are up at 58.9 euro cents. That pushes the TWI-5 up to 71.5 and a new three month high.

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