Here's my summary of the key events overnight that affect New Zealand, with news a US Fed rate hike next week is now much more likely.
This weekend we get the February US non-farm payroll report and markets expect payrolls to grow a little less than in January +227,000 with expectations of a +190,000 increase. But that may need to be revised now because the pre-cursor ADP report has come in suggesting an almost +300,000 rise. That is a surprise and is moving markets today; Wall Street is higher, the UST 10yr is up strongly, and the US dollar has risen sharply.
And because unemployment is relatively low, the output of those extra workers is constraining US productivity. It increased at a modest +1.0% in 2016, as output increased 2.2% and hours worked increased 1.2%.
American wholesale trade was up +8.4% in January from the same month a year ago. And that came as inventories rose just +2.2% over the same period.
In China, they have reported their first trade deficit in February since 2014. Imports surged and a slowdown during the Lunar New Year holidays hit output. Higher commodity prices and domestic demand were behind pushing February's imports up +38% on a year earlier. But exports unexpectedly fell -1.3%, giving a trade deficit of NZ$13 bln for the month. This has surprised markets as a NZ$38 bln surplus was expected.
Still, China is managing to hold back capital flight. Foreign exchange reserves inched up to just on US$3 tln in February after it has slipped just below that level in January. However some Chinese companies are not happy with the heavy handed way they are being blocked from making overseas deals.
In New York, the UST 10yr yield is rising sharply and is up to 2.55%.
Oil prices are down sharply today, at just over US$51 for the US benchmark, while the Brent benchmark is just over US$54 a barrel.
The gold price is also lower, by -US$10, to US$1,208/oz.
And the New Zealand dollar is falling against a stronger US dollar and is now at 69.1 USc. On the cross rates the Kiwi dollar is down at 91.7 AU¢, and against the euro is at 65.6 euro cents. The NZ TWI-5 index is down to just on 75 and that is a new five month low.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».