China to ease rules for foreign investors; China to bail-out zombie SOEs, EU allows Deutsche Bank a special advantage; Moody's warns on AU property; UST 10yr yield at 1.72%; oil and gold up; NZ$1 = 71.3 US¢, TWI-5 = 75

Here's my summary of the key events overnight that affect New Zealand, with news China is to do debt-to-equity swaps to rescue some zombie SOEs.

Firstly, remember today is a public holiday on Wall Street, so data flows will be thin. Japan is on holiday too.

China says it will ease rules for overseas investors in a bid to boost its slowing economy, but foreign firms operating in China say the changes may not go far enough.

And China has announced a new rescue process for highly leveraged SOEs and their banks. They are about to do wholesale debt-to-equity swaps, a process to be administered by a new 'bad bank/bad loan' authority in Beijing. This will certainly help their banks but if they are serious about earning a return on their capital, it is just a bookkeeping exercise to keep struggling firms alive. If they are not serious about earning a return in their SOEs, it is just corporate welfare. Without shutdowns, it is more of the Chinese equivalent of can-kicking.

Speaking of can-kicking, the EU allowed a special advantage for Deutsche Bank when it was subject to stress testing in July. It seems they were allowed to assume their deal with 2015 Hua Xia was completed. It wasn't, and it still isn't. It would have passed either way, but fudging like this undermines the whole process.

In Australia, Moody's is drawing attention to risks in their property markets. They cite high office vacancy rates in Perth and Brisbane and growing settlement risks from an oversupply of new apartments in Sydney, Melbourne and Brisbane as a risk to the banks that have funded the developments.

In New York, the UST 10yr yield is unchanged at 1.72%.

The US benchmark oil price is a little higher, now just over US$51 a barrel, while the Brent benchmark is now just over US$53 a barrel. Russia has said it will join OPEC if it decides to cap output to force a price rise.

The gold price is higher as well, up US$4 and now at US$1,257/oz.

The New Zealand dollar is lower against the US dollar from this time yesterday. It is at 71.3 US¢, and on the cross rates it is a lot lower against the Aussie at just 93.7 AU¢ which is its weakest level in 60 days, and it's at 64 euro cents. The NZ TWI-5 index is now at 75. And the Chinese are "letting" their currency slide again; it is now at a six year low against the US dollar.

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 ».