Dairy prices jump +6.6%, WMP up even more; RBA cuts to 1.5% but banks won't pass it all on; US consumer spending up; Japan oks stimulus plan; UST 10yr yield at 1.54%; oil under US$40, gold higher; NZ$1 = 72.3 US¢, TWI-5 = 75.3

Here's my summary of the key events overnight that affect New Zealand, with news Aussie banks are about to pull an old trick and stitch up their customers, again.

But first, this morning's dairy auction brought a pleasant surprise. Prices jumped +6.6% in USD although in Kiwi dollars they are up a more modest +3.9% since the previous auction. One bonus from this auction event is that the key WMP product is up a very respectable +9.9%. Overall, in USD prices haven't been this 'high' since November 2015, although that may just show how low they have drooped in the meantime. Still, there will be a few sighs of relief in the whole dairy industry and the analysts who watch it.

Across the ditch last night, the Reserve Bank of Australia cut its policy rate by -25 bps to an all-time low of 1.50%. Unfortunately for them, it had virtually zero effect on markets. Their currency hardly moved, and the big banks refused to pass all of it on. The response by the biggest bank in the country, CBA, shows how this public policy move seems to bring minimal benefits to borrowers and savers, but major benefits to bank shareholders. CBA said it would only pass on 13 bps of the cut to borrowers, but would add at least +50 bps to term deposit offers. That seems generous for savers, until you realise they did the same thing last time at the time of the announcement but rolled back the saver rise just a month or so later. And even though these banks are called out on the practice, there is no-one holding them to account in any practical way. Their election is over and the threat of a Royal Commission into bank behaviour is fading.

In the US, data out today shows consumer spending rose more than expected in June, showing underlying strength heading into the third quarter. In fact, American car sales remained strong in July as consumers continued to spend on pickup trucks and SUVs but the two biggest manufacturers in the market failed to hit analysts' elevated expectations.

Overnight, Japan formally announced its huge stimulus package, equal to about 5% of GDP. It is the latest roll of the dice there to induce growth in the world's third largest economy. Growth has been scarce in the past decade or more. A major problem has been that many such programs have been announced in the past but the actual stimulus delivered has been relatively small. The test here is to get it all out, quicker. If they do that, it will distort faraway places - like New Zealand.

Back in New York, UST 10yr yields are higher today at 1.54%.

But the US benchmark oil price has fallen even further and is now below US$40/barrel and the Brent benchmark is below US$42/barrel.

The gold price is going the other way, up US$13 to US$1,364/oz.

The NZ dollar is unchanged, showing no reaction to either the dairy price rise or the RBA rate cut. It will start today at 72.3 US¢, at 95.1 AU¢, and at 64.4 euro cents. The TWI-5 index is still at 75.3.

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 ».