Dairy prices don't fall; China's latest QE; China FDI sinks; corruption enquiry targets NZ; UST 10yr 2.57%; NZ$1 = US$0.818, TWI = 78.5

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

But first up, a surprise. The Fonterra dairy auction overnight did not fall. The GlobalDairyTrade index was in fact unchanged from the previous event; that was the US dollar index. In NZ dollar terms it was up +1.25%. That is the first rise since May and the largest rise since February. This was not a result the economists were expecting. Prices for cheese and butter did continue their declines, but the important milk powders was where the strength was. Looking over the last three auctions, it is possible that wholemilk powder pricing has now bottomed. The volumes sold in this  event were the second highest of the year.

In China, their government said overnight it is providing 500 billion yuan (NZ$100 billion) of liquidity funneled through the country’s five biggest banks. This is being seen by markets as direct stimulus to support economic growth. The Aussie dollar rallied on the news.

They need it because it was reported overnight that foreign direct investment into China has slumped to a four-year low amid antitrust probes into foreign companies, and more importantly the slowing of their manufacturing sector.

The anti-corruption campaign which has swept across China in the last two years has gone global. There was another dramatic story about one particular fraud overnight. Unrelated to that case, Communist party officials have launched an investigation into assets and individuals based in New Zealand, according to a report in the FT today. It is unclear whether that investigation was conducted inside New Zealand or from China, but investigators have requested permission to interview people here.

Back in New York, the UST 10yr benchmark bond yield fell overnight and closed at 2.57%. Equities are on the rise based on the China stimulus signals and in expectations of tomorrows Fed announcements.

The price of oil rose overnight. The US oil price is now just under US$95/barrel and the Brent benchmark is just on $99/barrel. Gold rose again from its sharp fall at the end of last week and is now at just US$1,236/oz.

We start today with our currency slightly higher against nearly everyone although the moves are not major. We are now just on 82.1 USc, at 90.1 AUc, and the TWI is at 78.6.

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

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