US factory expansion moderates; Fed officials say hikes 'on the table'; China jobs growth concerns, savings rate soars; AU factories shrink, tougher non-resident buying rules; NZ$1 = 75.4 US¢, TWI-5 = 79

Here's my summary of the key issues from over the weekend that affect New Zealand, with news of new aggressive anti-foreigner rules in Australia.

But first, US data out over the weekend, while not terrible, did little to alleviate growing worry about the immediate direction of the US economy. Two factory sentiment surveys, the ISM and PMI both reported anemic changes, although it must be recalled output is still strongly expansionary. But things are moderating noticeably.

But two top Federal Reserve officials both talked up the prospect of rate hikes, saying that even at the June review, a decision to increase their policy rate will be "on the table".

In China, factory surveys there were much tamer. The official one of large enterprises is still barely positive, the HSBC one still shows minor contraction.

To try and get their juices flowing again, China made some technical changes over the weekend to improve their sagging jobs market. It is not going to be easy.

Other recent easing policies, especially in their real estate market, seem to be having an impact. Home sales in key markets are trending higher again.

But worries about the sustainability of their growth is having a direct impact on individual household budgets: their savings rate has soared and shows no sign of declining. Faith in the future is low in China.

In Australia, their factory sector continued its steady, painful shrinkage in April. They haven't had any meaningful expansion in this sector since 2013. Their factorys' prospects are in stark contrast to ours - although our expansion is also slowing.

Australia is changing in other ways too. Firstly, they are getting tougher on foreign purchasers of real estate who don't play by their rules. They are also changing the rules (although those changes don't apply to Kiwis thanks to existing treaty provisions).

And secondly, their farmland is being eyed for major investment by Chinese beef suppliers. The Chinese are really interested because purchases there can quickly give it scale, something New Zealand can never offer.

Back in New York, the UST 10yr benchmark yield rose again on Friday to 2.11%.

The US oil price held at US$59/barrel, while Brent crude also held at US$67/barrel in final trading last week. And over the weekend, Iraq said it exported a record 3 mln barrels per day in April. At the same time, last week's US rig count fell again, as did the international count.

The gold price slipped a little further to US$1,178/oz.

The New Zealand dollar starts the week lower at 75.4 US¢, at 95.9 AU¢, and 67.3 euro cents. The TWI-5 is now at 79.

If you want to catch up with all the local changes on Friday, we have an update here.

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