Here's my summary of the key issues from overnight that affect New Zealand, with news that eased concerns about American labour markets.
Those worries about US jobs growth shifted overnight to a new perspective, one that sees higher wages sooner. Job openings surged to a 14-year high in February but the modest pace of hiring suggested employers are having trouble finding suitable workers; this is the trend that could put upward pressure of wage growth.
In a new report out from the IMF overnight, they say aging populations and sluggish advances in worker productivity are holding back the global economy and warn us to accept lower growth rates. A key downside is that it will harder to pay off national debt levels, they say.
In China, steel production unexpectedly fell during March, changing the usual pattern of a post-holiday jump. The news is not good for Australia's iron ore producers.
In New York, the UST 10yr yield rose marginally in trading today to 1.92%. NZ swap rates fell and flattened overnight. In fact the 1-5 curve is now just 3 bps and the five year swap rate is at its lowest level in almost two years. And international corporate investment grade CDS swap spreads have slipped back to levels last seen before the GFC more than seven years ago.
The US oil price is up today to US$54/barrel and Brent crude is at $59 a barrel continuing their recent rising trend. The US EIA released its April assessment overnight and it saw rising demand and ample supply of energy fuels.
The gold price fell back about $10/oz and is now at US$1,209/oz.
In case you missed it, the Reserve Bank of Australia held interest rates at 2.25% for the second month in row late yesterday. That pushed demand for the AUD higher and off six-year lows, and took the NZD away from technical Mid-rate parity. But we are still at parity at bank Buy rates this morning. India also decided not to change rates.
The New Zealand dollar will start today noticeably lower at 74.9 US¢, still very high against the Aussie at 98.2 AU¢, and the TWI is just on 80.
If you want to catch up with all the local changes yesterday, we have an update here.
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