Equities rise on trade talk restart signal; US data positive; US Fed says trade war costing -1% growth; China ready to lower reserve ratio; UST 10yr yield at 1.56%; oil unchanged and gold dumped; NZ$1 = 63.8 USc; TWI-5 = 69.1

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Here's our summary of key events overnight that affect New Zealand, with news of a growing smile in global equity markets.

Financial market sentiment is much improved today because there seems to be an appetite by both China and the US to resume trade talks. China has announced that trade talks will recommence at a senior level in early October with their negotiator going to Washington DC. Before then, lower level officials will work to clear or narrow the key issues. Wall Street is up +1.3% on the news which came out late yesterday. Shanghai was up +1.0% and Tokyo up +2.1%. (Hong Kong has other issues and while it did rise spectacularly on Wednesday on local news, it barely changed yesterday with this news.)

There was other better news in the US. The precursor employment report for this weekend's August non-farm payrolls report came in more positive than expected. Tomorrow's non-farm payrolls are expected to rise by +160,000, a relatively low result and very similar to the July result. Employment levels may be growing, but not everyone is happy.

There were two US service sector PMI reports out overnight with contrasting messages. The local membership one was positive showing a stronger expansion, the internationally-benchmarked one was weaker, reporting an expansion that is cooling to near a stall. Take your pick. The markets however chose the optimistic one.

The final report for US factory orders however came in better than the earlier flash result. But within that the important durable goods orders component weakened, weighing on the result.

Markets know what the US Federal Reserve research shows: American trade policy will reduce American economic output by more than -1% through to early 2020.

Globally, service sector growth slowed as business confidence slid further.

Air cargo continues to suffer from weak global trade and the intensifying trade dispute between the US and China. Global trade volumes are -1.4% lower than a year ago and trade volumes between the US and China have fallen by -14% year-to-date compared to the same period in 2018.

In China, their housing market is cooling fast. And authorities have signaled they are about to cut their bank reserve ratio.

In Europe, their equity markets rose about +1% across the board. The exception was London which fell about -0.6% in the shadow of their Brexit debate omnishambles.

The UST 10yr yield is up +10 bps to 1.56%. Their 2-10 curve is now still positive at +2 bps. Their negative 1-5 curve is narrower at -32 bps. And their 3m-10yr curve is a negative -48 bps which is also narrower. The Aussie Govt 10yr is leapt +14 bps to 1.09%. The China Govt 10yr is fell -3 bps to 3.05%, while the NZ Govt 10 yr is up +3 bps at 1.09%.

Gold has dropped sharply, down -US$37 or -2.4% to US$1,518/oz.

US oil prices are unchanged today at just on US$56/bbl. The Brent benchmark is still at US$60.50.

The Kiwi dollar has firmed to 63.8 USc. On the cross rates we are unchanged at 93.6 AUc. Against the euro we are the same at 57.8 euro cents. That puts the TWI-5 at 69.1.

Bitcoin is now at US$10,523 and down -1% from this time yesterday. 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 ».