House sales in US boom, China's growth forecast downgraded, business investment contracting in Aust, yuan may become global reserve currency, NZ$1 = 71.8US¢, TWI-5 = 76.4

Here's my summary of the key issues from overnight that affect New Zealand:

The number of previously owned homes sold in the US hit a nine-year high in April. The index used by the US's National Association of Realtors to assess house resales, was up 14% from April last year, and has increased year-over-year for eight consecutive months. 

Despite low inventory levels putting upward pressure on house prices, economists are still expecting this growth to continue in coming months. 

While other US data showed an unexpected increase in new applications for unemployment benefits, filings remained at levels consistent with a tightening labor market.

HSBC has cut its forecast for China's GDP growth for 2015, from 7.3% to 7.1%. It says export growth has been weaker than expected so far this year - a reflection of softer external demand and a strong yuan. It also believes more aggressive interest rate easing policies are needed to support growth. 

China's currency, the yuan, is touted to join the US dollar, euro, pound and yen, and become a global reserve currency this year. The International Monetary Fund hinted at the promotion this week, saying it no longer considers the yuan undervalued. It'll make a decision on the matter in October.

Across the ditch, business investment is contracting at its fastest rate in more than five years, and won't improve any time soon, according to the grim results of the latest capital expenditure survey. The Australia Bureau of Statistics says private sector March-quarter investment in buildings, equipment, plant and machinery dropped 4.4% from the previous three months, and 5.3% over the year.

In New York, the UST 10yr benchmark yield is down to 2.14%.

The price of oil has inched up overnight to US$58/barrel. Brent crude is at US$63/barrel.

The gold price is also up slightly to US$1,189/oz.

The New Zealand dollar starts today weaker than this time yesterday. It's dropped to 71.8 US¢ and 65.6 euro cents. Even though it's strengthened slightly to 93.9 AU¢ over the past 24 hours, it's nearly a half a cent weaker against the Australian than it was yesterday afternoon. The TWI-5 is at 76.4.

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 »