Dairy prices unchanged in USD, down sharply in NZD; WMP weak; US Fed stands pat, still signals hikes this year; UST 10yr yield 1.60%; oil lower, gold higher; NZ$1 = 70.6 US¢, TWI-5 = 73.9

Here's my summary of the key events overnight that affect New Zealand, with news the US Fed is turning more cautious.

But first up today, the overnight dairy auction brought no change to overall prices. However, the key WMP price did fall sharply. It is down another -4.5%.

But, as the Kiwi dollar has strengthened considerably since the last event, prices in local currency have sagged noticeably. Overall, prices in NZD are down -3.5%, wiping out the gain we saw on June 2. The WMP price in NZD is much worse, down -7.8%. It has been cheese, butter, and SMP prices that have trended up to limit the damage.

In China, they reported electricity use was up +2.1% in the year to May. This may be a better indicator or actual China growth.

Earlier this morning, the US Fed scaled back plans to hike its benchmark interest rates as economic growth has disappointed expectations. But it has still signaled that two more increases this year are on the cards. The Brexit vote in the UK was a key reason the Fed held today.

It said it expects the American job market to strengthen after a surprise weak May reading. And 11 of the 17 Fed policy makers expect more than one rate rise in 2016 even though that is one fewer than at the last count.

This latest assessment comes after stronger than expected retail sales were reported yesterday, producer prices rising more than expected, and better than expected factory conditions in the New York region which were all reported today. But the Fed's own assessment of industrial production nationwide was weaker in May.

Equity markets are higher today in New York.

However, the benchmark UST 10yr yield is basically unchanged following the Fed statements at 1.60%. Yesterday we saw local rates fall and flatten but overnight they rose, cancelling out that drop.

The oil price is falling today. The US benchmark is now just under US$48/barrel and the Brent benchmark just under US$49/barrel.

The gold price is up slightly and now up to US$1,291/oz.

And finally, the NZ dollar, which fell earlier in the day is back to the same levels it was at this time yesterday at 70.6 US¢, at 94.9 AU¢, and at 62.6 euro cents. The TWI-5 index is now at 73.9. We should also note that the embattled Nigerians have been forced to float their currency, which promptly tanked, in the face of their severe economic crisis brought on by low oil prices and rampant corruption.

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 ».