Climate deal requires $20 tln; US data good; China data mixed; worries over derivative risk; China signals Yuan depreciation; UST 10yr yield 2.13%; NZ$1 = 67.2 US¢, TWI-5 = 72.3

Here's my summary of the key events over the weekend that affect New Zealand, with news there has been a climate deal in Paris.

But all it needs now is something in the order of NZ$20 trillion in investment to make it work. (See page 4.)

In other news, US data out on Saturday won't be changing any minds at the Fed. Retail sales were higher by almost +1.5% year-on-year despite low energy prices, and especially strong for car sales and 'general merchandise'.

The latest update on consumer confidence came in just marginally better than for November, and probably setting up quite a good holiday sales season.

Data for November out of China was stronger than expected, signaling that a flurry of stimulus measures from Beijing may have put a floor under concerns about their economy. Retail sales rose by their fastest pace in a year, up +11%, and factory output picked up notably in November as well.

Equally impressive, but in a negative way, is the fall and fall of their housing markets. Investment is falling away relentlessly.

And even more worrying is the slump in steel demand. Data out for November* has prices falling precipitously. A review for December said it isn't going to get any better. In the desperate rush to sell, they are facing anti-dumping pushback in a number or markets.

It is this China data that continues to buffet markets for hard commodities. Oil prices have now fallen to eight year lows, and iron ore prices continue to tank.

All eyes this week will be on soft commodity prices, especially on dairy prices in the Fonterra auction early Wednesday morning. Fonterra has a lot at stake having announced it is holding its payout estimate because it believes prices will rise in the New Year.

Back in New York, American regulators are considering restrictions on the use of derivatives by mutual, exchange-traded and other funds. They are concerned that investors are exposed to too much risk. Interestingly, ANZ's New Zealand's balance sheet is just loaded with derivatives, on a gross basis more than NZ$1.4 trillion (see page 20, Note 10), mainly in swap agreements. You wonder in NZ regulators are worried too.

In New York, the UST 10yr yield benchmark fell sharply on Friday and is now at 2.13%.

The US benchmark oil price is down yet again, now just at US$35/barrel, while the Brent benchmark is now under US$38/barrel.

The gold price rose on Friday, now at US$1,076/oz.

The New Zealand dollar is now at 67.2 US¢, at 93.5 AU¢ and at 61.1 euro cents. The TWI-5 is now at 72.3.

And over the weekend China signaled that it is about to loosen the peg of the Yuan to the US dollar. Things could get interesting because that probably indicates a depreciation in the Chinese currency.

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

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

* Yes, I know. It says "January" in Google Translate. But it is actually November data.