Here's my summary of the key events overnight that affect New Zealand, with news the Panama Papers have claimed their first casualty. Iceland's Prime Minister Sigmundur David Gunnlaugsson has stepped down following protests in the wake of leaked documents showing his wife owned an offshore company with big claims on Icelandic banks.
In other news, there's a sting in the tail of the fortnightly GlobalDairyTrade auction. While the GDT price index inched up 2.1% to US$2,188, it's actually slumped 0.9% in NZ dollar terms. As for the price of Whole Milk Powder, it's inched up 1.5% to US$2,013, but fallen 0.7% in New Zealand dollar terms.
AgriHQ has cut its 2015-16 Farmgate Milk Price by 8 cents following the auction, putting it $1.19 below DairyNZ's break-even price of $5.25 per kg of milk solids. Fonterra's forecast price for the season is even lower than AgriHQ's, at $3.90/kgMS.
India's central bank has cut interest rates to their lowest level in five years, as it aims to boost the economy in the face of falling inflation and global uncertainties. The Reserve Bank of India cut its wholesale rate by 25 basis points to 6.5%. It's governor has hinted at further cuts, saying the bank's policy would remain "accommodative". He's kept the bank's GDP forecast for the financial year at 7.6%.
Economic activity in the US's non-manufacturing sector has grown for the 74th consecutive month in March. The Institute of Supply Management's services industry index is up to 54.5 points. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the US economy.
In New York the benchmark UST 10yr yield has fallen 4 basis points since yesterday, to 1.73%.
The US crude oil price is unchanged at US$36/barrel, while Brent remains at US$38/barrel.
The gold price is up to US$1,228/oz.
The NZ dollar has weaken a half a cent over the past 24 hours to 67.9 US¢. It's up slightly to 90.1 AU¢ and down to 59.7 euro cents. The TWI-5 is lower at 71.2.
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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2 Comments
Moments ago the US Treasury priced its 4 Week Bill auction, which was unique in that at just $35 billion, was not only $10 billion lower than a month ago, but was the lowest since October 15.
This may or may not explain why after last week's curious auction yield of 0.20%, or 5 bps below the effective Fed Funds floor, today's auction showed an even more dramatic scramble for short term liquidity, when the government sold 4 Week Bills at a rate of 0.185%, or 6.5 bps below the rate charged by the Fed! Read more
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