Here's my summary of the key events overnight that affect New Zealand, with news the Federal Reserve has kept interest rates on hold.
The US central bank has maintained the target range for the federal funds rate at 0.75% to 1%, in line with expectations.
It’s dismissed slowing growth in the first quarter as “transitionary”. The Federal Open Market Committee expects economic activity to expand at a “moderate pace”, labour market conditions to “strengthen somewhat further” and inflation to stabilise at around 2% in the medium term.
The seemingly confident Committee has kept the door open to a rate rise when it next meets in June. It sees economic conditions prompting “gradual” increases and says its policy remains “accommodative”.
US companies hired workers at a slower but still-solid pace in April, while the services sector grew more than expected.
According to US payrolls processor, ADP, private employers added 177,000 jobs last month. It was the smallest gain since the 62,000 increase last October, but slightly above the expectations of economists polled by Reuters.
Growth in the Eurozone in the first quarter has outstripped that of the US, according to a preliminary estimate by the European Union’s stats department.
Eurostat says gross domestic product (GDP) grew by 0.5% in the quarter, which translates to an annualised growth rate of 1.8%. The US’s figure for the same period sits at 0.7%.
The level of growth in the region dampens euro-skeptics’ claims that being part of the EU is hampering their national economies.
In other news, global air freight demand in March was the strongest it’s been in over six years. Rising by 14% year-on-year, the International Air Transport Association says demand is consistent with an uptick in world trade and a six-year high in new export orders.
It notes an increase in the shipment of silicon materials used for electronics, has also contributed to the result.
In New York, the UST 10yr yield has increased to 2.30%.
Oil prices remain lower. The US crude benchmark is at US$47.50 a barrel, while the Brent benchmark is up a bit to US$50.77.
The gold price has continued to slip to US$1,243/oz.
The New Zealand dollar has fallen against the US further to the Fed’s statement, to 68.7USc. It’s up to 92.5 AU¢ and down to 63.1 euro cents. The NZ TWI-5 index has dropped to 73.7.
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 ».