US jobs growth slows even as service sector grows; US trade deficit shrinks; global airfreight volumes fall; €500 note out of production; ANZ keeps part of RBA cut; UST 10yr yield 1.79%; oil and gold lower; NZ$1 = 68.7 US¢, TWI-5 = 71.5

Here's my summary of the key events overnight that affect New Zealand, with news ANZ keeps some of the RBA rate cut for itself.

But first, the latest version of the ADP Employment Report, the precursor to this weekend's release of the US non-farm payrolls report, shows a much lower than expected rise in new jobs created in April. They were up +156,000, but below the +195,000 gain expected. Almost all the rise was from a stronger services sector; the factory sector shed jobs in April.

Two other service sector reports (here and here) showed similar readings.

The American trade deficit shrank to just on US$40 bln, its lowest level in a year. Exports however fell, but imports fell even more sharply, mainly because of lower levels of consumer goods imported.

The first signs of international airfreight slowdowns are being reported. IATA says freight-tonne-kilometers fell -4% in March compared with the same month a year ago. And in the US, April orders for large trucks fell sharply.

The ECB has announced that it will no longer produce any more €500 bank notes because of its role in facilitating illegal activity. Each is worth NZ$830 and NZ$1 mln worth weighs just 2 kgs, easily held in a small bag. It is known in some quarters as the 'Bin Laden bank note'. Virtually no other central bank produce a note of such high unit value. It will still be legal tender however until they are withdrawn from circulation over time. However, some see a 'conspiracy' involved to undermine a citizen's 'right to make anonymous transactions', even one to make negative interest rate policies easier to impose. The growth in paper money issued recently seems curiously out of step with the fast switch by most people to use electronic transactions. It's a trend even evident in New Zealand. Our growth in $50 and $100 notes is three times the growth in the real economy.

In Australia, all banks have passed on the -25 bps rate cut by the RBA - except the ANZ. They have kept 6 bps for themselves because of 'higher funding costs'. ANZ have form for this type of move; they led the way in New Zealand, holding on to a part of the last rate cut in New Zealand for the same 'reason' - even though wholesale swap rates are now at near record lows. Regulators just seem to turn a blind eye to this capturing.

In New York the benchmark UST 10yr yield is slightly higher at 1.79%.

But the oil price is a tad lower, now just over US$43/barrel in the US, while Brent is now just over US$44/barrel.

The gold price is down -US$17, now at US$1,274/oz.

And finally today, the NZ dollar opens at 68.7 US¢, at 92.1 AU¢, and at 59.8 euro cents. The TWI-5 index is now at 71.5.

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 ».