Here's my summary of the key events overnight that affect New Zealand, with news of reform challenges in the US, China and Australia.
But first, dairy prices fell much less this morning than many market observers had feared. Some were expecting another -10% fall, but in the end it was just a -2.8% reduction from the last auction two weeks ago (-3.8% in NZD). Still, that takes prices back to where they were near the low point in August last year; and prior to that they were last at this level in August 2009. Last night, the key WMP component was down -3.7%. You should also note that prices are now below Fonterra's last payout forecast.
In the US, the Federal Reserve's newest policymaker, who is a former Treasury official and prior to that a Goldman Sachs executive, called on lawmakers to consider "bold, transformational" rules including the breaking up of the country's largest banks to ensure taxpayers are no longer on the hook should they fail.
Meanwhile, Standard & Poors is warning that systemic risks in China, and the possibility of sudden policy shifts, are combining to fuel a borrowing spree by their corporates which is likely to bring some rapid ratings downgrades, including those of the country as a whole. Even their Premier acknowledged "great challenges and new uncertainties". And that may be understating it.
In Australia, NAB boss Andrew Thorburn has told the locals that they can probably no longer afford what their citizens expect, and the pressure will get tighter unless they make some hard reform choices and how they make policy changes happen. And probably infuriating them further, he says Australia should adopt how New Zealand is achieving its changes.
In New York the benchmark UST 10yr yield is higher at 1.78%.
The US oil price is down to US$29/barrel while Brent is just on US$32/barrel. Both Russia, Venezuela and Saudi Arabia said they had agreed to freeze output - if everyone else does too. But price optimism quickly cooled on that idea because Iran is unlikely to follow. China also announced it is not adjusting its retail price of petrol down to reflect the low crude prices, helping to keep a lid on demand.
The gold price is a little higher today at US$1,213/oz.
The NZ dollar fell yesterday by about -1c after the weaker-than-expected survey results for inflation expectations. But after today's dairy auction, it has not moved any further. It is now at 65.6 US¢, at 92.4 AU¢, and at 58.9 euro cents. The TWI-5 will start today at 70.3.
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 ».