US inflation, retail below expectations; GE supports NAFTA; US-China trade deal invites derision; China claims initiative on trade; Aussie investors recoil; UST 10yr yield up to 2.33%; oil and gold unchanged; NZ$1 = 68.6 US¢, TWI-5 = 73.6

Here's my summary of the key events from over the weekend that affect New Zealand, with news that countries committed to international trade are making news this weekend.

But firstly in the US, their consumer-price index rose a seasonally adjusted +0.2% in April from the prior month. Although that was what markets were expecting for the overall index, excluding the often volatile categories of food and energy, so-called core prices rose just 0.1% from March and lower than expected.

April retail sales, especially for those not online, also came in below expectations with a month-on-month rise of +0.4% when markets were expecting +0.6%. Consumer confidence held steady in a respected survey.

And in a direct rebuff to President Trump, one of America's - and the world's - largest companies, GE, praised Mexico as a big part of its future and said the company is "very supportive" of the North American Free Trade Agreement - one Trump has vowed to tear up.

And more on the trade front, China and the US also agreed a 'new' trade deal. However by any measure it is a timid affair, selectively ticking off only a few items and favouring only a few companies or industries on either side. The list of issues not covered is long, and no high-profile election campaign promises have been included.

And China has been touting its One Belt, One Road initiative this weekend. This is one where it is building a controlling network of trade routes through Asia, Africa and Europe, with China at the centre. It is a money-talks initiative that comes at a fortuitous time for it while the US retreats into protectionism.

Germany's economy is firing on all cylinders. Exports are rising faster than imports. Investment and consumption drove first-quarter GDP growth which was up +0.6%, faster than the October-to December 2016. Year-on-year, that is growth at a +2.9% pace. Household and state spending were strong, while firms invested money in construction and equipment.

In Australia, the Federal budget change (see page 30) where residential property investors will no longer be able to claim depreciation deductions on a formula basis, especially on chattels, is likely to have a very sudden change to investor behaviour.

In New York, the UST 10yr yield is very much lower today at 2.33%. An unstable US president is raising the political risk, and bond markets are pricing in heightened concerns. That uncertainty is flowing into consumer retail buying habits, and in turn the ability of companies to raise prices.

China's ten year government bond yield is at 3.67% while their 5 year has slipped marginally to 3.66%.

The price of oil is unchanged. The US crude benchmark is still just over US$47.50 a barrel, while the Brent benchmark is just over US$50.50. The US rig count rose again; that is now a rise in 49 of the past 52 consecutive weeks and the highest level in just on two years. Rig counts outside the US are now at their lowest levels of the year.

Gold is a little higher at US$1,227/oz.

The New Zealand dollar is holding at its lower level 68.6 USc. On the cross rates the Kiwi is at 92.9 AU¢, and 62.8 euro cents. The TWI-5 index is at 73.6.

If you want to catch up with all the changes on Friday, we have an update here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».