Here's my summary of the key events overnight that affect New Zealand, with news there are some signs commodity prices are stirring.
The latest dairy auction overnight has seen rising prices, especially for wholemilk powder. That jumped +7.5% but only to US$2,156/tonne and still far below where it needs to be to shift the milk payout meaningfully.
Overall, prices only rose +3.8% in US dollar terms, held back by cheese prices. And unfortunately the Kiwi dollar is strengthening at the same time which wipes out most of this gain; in NZ dollars prices were only up a miserly +0.2%.
In the US the pace of home building in the fell in March to its lowest level since October, another sign momentum in the housing market is slowing after a strong 2015. Building consents and housing starts were lower than for February, but still well above the same month a year ago. Completions were up on both measures.
According to one respected research group, an interesting situation is developing in the US. It is fast approaching full employment, they say, and they see few signs the population of working-age Americans will growing enough to fill the ranks left by retirees and rising demand from employers. In fact, they see a "prolonged period of tight labour markets around the globe". This is certainly a different perspective from all the recent talk of robots taking all the jobs.
China reported overnight that its urbanisation rate had reached 56% in 2015. That is more than 750 mln people living in their 653 cities. They aim to add another 100 mln by 2020 with an urbanisation rate goal of 60%. That represents a lot of development to come. Just for comparison's sake, New Zealand has an urbanisation rate of over 86% and a rise of over +1% in the past five years.
In a speech in New York overnight, the governor of the RBA noted that ultra-low interest rates create big problems for savers. "The issue is when long rates are very low for a long time" he said. "In such a world, the whole set of assumptions embodied in retirement income plans will be called into question." He would rather see policy accepting low growth than low rates.
In New York the benchmark UST 10yr yield is marginally higher today at 1.79%.
The oil price rose slightly overnight to just over US$41/barrel in the US, while Brent is now just over US$44/barrel. The Kuwaiti oil strike is now in its third day and that is affecting output from this Gulf producer. And Iran is struggling to find enough ships to deliver its new big supply flows. Many tankers are already full, being used as storage.
The price of iron ore jumped another +4% yesterday, on top of a +3% jump a few days ago. That brings the 2016 price rises to more than +44%.
The gold price is up US$19 to US$1,252/oz. China is challenging London and New York as a gold centre. It has started issuing an 'official' twice-daily fix price in yuan. It makes sense I suppose because China is both the world's largest consumer and producer of gold. (It overtook India recently.)
And finally today, the NZ dollar opens at 70.4 US¢ up a whole cent from this time yesterday and its highest level since mid June last year, at 90.1 AU¢, and at 61.9 euro cents. The TWI-5 index is now at 73, its high for the year.
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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