Here's my summary of the key events overnight that affect New Zealand, with news our swap rates have fallen sharply opening up the chance of lower local interest rates.
But first, in the US activity in their vast services sector slowed to a near two-year low in January, suggesting that American economic growth weakened somewhat at the start of the first quarter even as their labour market remains resilient. We will get their non-farm payrolls report on Saturday and analysts are expecting growth under +200,000 in January, way below the almost +300,000 in December.
US Fed officials are noticing a tightening of conditions in the US.
China is further down the track and expected to loosen its reserve ratio requirements for banks soon.
At least their services sector is growing to pick up some considerable slack.
But as China switches gears away from heavy investment and toward consumption, the reverberations are being felt especially in Australia. Their trade position has steadily deteriorated, culminating in a record A$32.7 bln deficit in 2015, according to data dating back to 1971.
And international airfreight growth slowed to +2.2% in 2015 from +4.5% the previous year.
In New York, the benchmark UST 10yr yield has slipped slightly today from this time yesterday and is now at 1.86%. Yesterday in New Zealand we saw a dramatic fall in swap rates and flattening of the rate curve. In fact, it is now the flattest it has been in six months and rates for 4, 5 and 7 years are either at or near record all-time lows. The two year swap rate is back to levels we last saw in November 2012.
And that has come as credit spreads jumped today in all main markets.
The gap between US WTI oil price and the Brent benchmark has widened slightly although both are US$1.80/barrel higher today. The US price is now at US$31.50 while Brent is at US$34.5/barrel.
The gold price has jumped US$12, and is now up to US$1,139/oz.
The Kiwi dollar starts today noticeably higher as well at 66.5 US¢ a four-week high, at 93.3 AU¢, and at 60.2 euro cents. The TWI-5 starts today at 71.5. Yesterday's strong jobs numbers are impressing investors.
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 ».