US job openings rise, layoff fall; US deficit on track; Fitch raises NZ growth forecast; Stevens says low rates can't fix growth; UST 10yr yield at 1.52%; NZ CDS spreads fall; oil slips, gold up; NZ$1 = 72.3 US¢, TWI-5 = 75.2

Here's my summary of the key events overnight that affect New Zealand, with news all eyes today will be on Graeme Wheeler and his latest Monetary Policy Statement.

But first, in the US, job openings increased in June and layoffs dropped to their lowest in nearly two years as labour market conditions tightened further.

The latest update on the US Federal budget deficit shows little change from its track to come in well under -3% of GDP, a level they can easily afford.

In New Zealand, Fitch Ratings has affirmed our sovereign Long-Term Foreign-Currency Issuer Default Rating at 'AA' and its Long-Term Local-Currency rating at 'AA+'. Their Outlook for us is Stable. They have raised their forecast for GDP growth to +2.7% for 2016 and 2017, from +2.4% and +2.6%, respectively, and they see the current account deficit staying unchanged at -3.0% of GDP. Housing is a vulnerability they say, but they like the measures the RBNZ is taking to keep a lid on this.

In Australia, RBA governor Glenn Stevens delivered his final speech before retiring next month, saying Australia's economic recovery can’t be achieved through lower interest rates alone. He said government spending had to play a role, as long as it was targeted on projects likely to create jobs and support productivity growth. “We can’t just assume that monetary policy can simply dial up the growth we need. We need some realism here,” he said. This speech actually triggered a rise in the AUD.

In New York, the UST 10yr yield is lower today at 1.52%. The return on some UK government debt turned negative earlier today after the Bank of England missed its target in a new bond buying operation. Gilts maturing in 2019 and 2020 are now yielding -0.1%. They may no be making a yield, but the price gains are what bond investors are after and what they are getting. Hard to call bond investing "fixed income investing" these days in some countries. And our own 10yr swap rate starts today at an historic low of just 2.41%.

And we should also note - related perhaps to that Fitch rating update - NZ's sovereign risk weighting as measured by CDS spreads, has fallen to a new low of just 23 bps. That a drop by a half since the start of the year and bolsters the country's financial reputation.

The US benchmark oil price has slipped a little more today and is now under US$42/barrel and the Brent benchmark is just over US$44/barrel. They fell after weekly American inventory data showed that their stocks of crude oil and other petroleum products rose last week to a record high.

The gold price is slightly higher again and now at US$1,345/oz.

The NZ dollar is higher by more than ½c from this time yesterday at 72.3 US¢, at 93.5 AU¢, and at 64.6 euro cents. The TWI-5 index is at 75.2. Check back here at 9am to see how it reacts to the RBNZ Monetary Policy Statement.

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 ».