US Fed signals June rate hike; traders don't like it; Japan Q1-16 GDP rises unexpectedly; Aussie wage growth slows; UST 10yr yield 1.82%; oil unchanged, gold lower; NZ$1 = 68 US¢, TWI-5 = 71.6

Here's my summary of the key events overnight that affect New Zealand, with news that Aussie wage growth, and therefore purchasing power, is slowing.

But first, the US Fed has sent an unusually frank message to Wall Street, delivered in the official minutes of their April meeting which are out today. They minuted that if growth, the labour market, and inflation all pointed in a positive direction, it "would be appropriate for the Committee to increase the target range for the federal funds rate in June". (Page 10.) And the recent data seems to suggest they will pull the trigger on a +0.25% rise on June 16. Benchmark rates rose on Wall Street. Equities switched from being up to being lower on the day.

Perhaps surprising many, Japan's economy has dodged a recession after it grew faster than expected in the first three months of the year. Their GDP grew at an annualised pace of +1.7%. Markets were expecting +0.3% and in Q4 2015 growth was a negative -1.7%. The better-than-expected growth rate came after higher government spending helped to offset weakness in business investment and exports.

Aussie wage growth in the March quarter came in quite low, at +2.1% pa. This is its lowest rate since this data series started in September 1998. Not only was it low, but rises in the private sector were even lower. Still, real wages are still rising because their inflation is even lower at only +1.3% pa. All eyes today will be on their unemployment data.

In New York the benchmark UST 10yr yield jumped today to 1.82% on the release of the Fed minutes. This will no doubt flow into local wholesale rates today, rates that have been getting flatter here recently.

The oil price is basically unchanged with the US benchmark now just over $48/barrel and the Brent benchmark just under US$49/barrel.

The gold price fell by a bit more than US$10 and is now at US$1,266/oz.

And finally today, the NZ dollar is also little changed and will start at 68 US¢, at 93.1 AU¢, and at 60.2 euro cents. The TWI-5 index is now at 71.6.

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 ».