Here's my summary of the key issues from over night that affect New Zealand, with news of a resurgent Japanese economy.
But first, five of the world's largest banks, including JPMorgan Chase, Citigroup, UBS, RBS and Barclays were fined NZ$7.8 bln overnight in a multi-country penalty, and pleaded guilty to American criminal charges over manipulating foreign exchange rates. NZ$3.4 bln of that was a fine imposed by the US Justice Department. Total fines in the affair now exceed $13.7 bln. But that is just the start. What these guilty pleas do is open the way for easier civil suits by affected parties, mainly by pension funds and fund managers.
Minutes released today show that the US Fed thought it would be premature to raise interest rates in June and that a small rise in inflation was being offset by a weaker labour market and other softer data. A June rate hike seems unlikely now, but the tone suggests they do want to raise rates soon. Their next meeting is on June 18 NZ time, a week after the next RBNZ Monetary Policy Statement.
Japan surprised markets overnight by reporting Q1 GDP growth much higher than expected. The figures support the official view that their economy is recovering, and growth in corporate profits is leading to pay raises for workers and greater consumer spending. Abenomics might be working after all.
The Australian mining industry has woken up today to news that China is investing about $50 bln in their rival Brazilian suppliers in a game-changing commitment.
Back in New York, the UST 10yr benchmark yield held its recent gains, rising marginally again and now at 2.26%.
The US oil price rose slightly in trading today and is now at US$59/barrel, while Brent crude is at US$65/barrel. Lower US stock levels motivated the change.
The gold price is marginally higher too at US$1,210/oz.
The New Zealand dollar starts today lower against the greenback at 73.1 US¢, holding against the Aussie at 92.7 AU¢, and at 65.9 euro cents. The TWI-5 is at 76.8.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »
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