China to need double natural gas supply; China inflation up; US hiring expands; UST yields rise; gold higher; NZ$1 = US$0.852, TWI = 79.5

Here's my summary of the key news overnight in 90 seconds at 9 am, including important news out of China.

In a report out overnight, the International Energy Agency says that China will almost double its demand for natural gas over the next five years. That will seriously shake up energy markets and drive new exploration. India is likely to be a big buyer too. Stories like NSW's imminent 17% price hike may become common.

China’s inflation accelerated in May to 2.5%, the fastest pace in four months. Food costs were the main driver, while a decline in factory-gate prices moderated. However, it is still remains well below the government’s full year target.

In the US, an official survey of hiring and new job openings has them at a level not seen since September 2007 and hiring is at its fastest pace since June 2008.

UST 10yr bond yields are up another 3 bps in trading in New York today. Those rises will likely flow through to NZ swap markets. That UST yield is now 2.64% following an overnight auction of 3yr notes that saw rising yields as markets accept that the US economy is now firmly in expansion mode.

Interest rates might be rising in the US but they are certainly falling in Europe. The AFR is reporting that the ANZ Australia has borrowed at 1.25% from there, "raising the prospects of cheaper mortgages".

Although the oil price rose to above US$105/bbl overnight, it has now fallen back and is basically unchanged from this time yesterday. Gold however has risen and is almost touching $1,260/oz, up more than US$6/oz.

On the exchange rate the NZD has risen overnight on a growing risk appetite. It starts today at 85.2 USc, at 91.0 AUc and the TWI is at 79.5.

If you want to catch up with all the changes from yesterday we have an update here.

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