Here's my summary of the key issues from overnight that affect New Zealand, with news of an IMF review of global growth prospects.
But first, American retail sales rose in March for the first time since late last year as consumers bought more cars especially, adding to views that a sharp slowdown in US economic growth in the first quarter was temporary.
Somewhat going against that news, business confidence of small companies in the US fell in March as hiring and capital spending plans weakened.
Meanwhile in their latest review, the IMF issued a Report overnight on world growth prospects. It said that despite improvements in the United States and Europe, threats remained from emerging economies, high levels of debt and fragile banks.
They say that New Zealand will see its exchange rate fall as our commodity export prices fall, but we will get better purchasing power from the lower oil prices. They also classed us in a region that will out-perform the rest of the world.
Interestingly, they also noted that India’s growth is expected to strengthen from 7.2% in 2014 to 7.5% in 2015, providing some impetus to world trade that China is giving up. Indian growth will benefit from recent policy reforms, a consequent pickup in investment, and lower oil prices. Those lower oil prices will raise real disposable incomes particularly among poorer households, and help drive down their inflation.
In Australia, their weather bureau has issued an alert about a major El Niño pattern developing this year. That means drought conditions will be more likely in the east of New Zealand - disappointing because we had those conditions over the past two years as well.
In New York, the UST 10yr yield fell overnight to 1.87%.
The US oil price has inched higher today to US$53/barrel and Brent crude to $59 a barrel. China is reported to be filling its boots while the prices are low.
The gold price however has fallen further and is now at US$1,193/oz.
The New Zealand dollar will start today higher as stock markets go risk-on following the good US retail data. It is at 75.2 US¢, at 98.6 AU¢, and the TWI is just on 80.6.
If you want to catch up with all the local changes yesterday, we have an update here.
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