US household income and spending rise quicker; US Q2 GDP growth improves; EU targets record budget; NIB sued for 'deceptive conduct'; UST 10yr yield 2.21%; oil and gold lower; NZ$1 = 71 US¢, TWI-5 = 75.3

Here's my summary of the key events from overnight that affect New Zealand, with news an Aussie insurer is being sued for 'deceptive conduct'.

But first in the US, Americans increased their spending in April with the biggest increase in four months, and there were upward revisions to the March data. These were matched by income growth. That takes the year-on-year growth in consumer spending to +3%. At the same time, prices of what they bought rose at a healthy but lesser clip. Both sets of data confirm the expectation of a June rate hike from the Fed.

That data was bolstered by the GDP-Now calculator at the Atlanta Fed. It is predicting US GDP growth at +3.8% in the second quarter, up a tick from last week's prediction and materially higher than the 1.2% rise in the first quarter.

Perhaps the only cloud today is the unexpected slip in a respected consumer sentiment reading. This survey found current sentiment steady, but there are clear concerns looking forward and probably related to the turmoil in Washington.

Across the Atlantic, a record spending budget was announced by the EU in Brussels. And they will suggest the euro zone might need to issue collective debt and run a joint budget. These are ideas from the new French President Macron. But the big spending plan may also be about the Brexit negotiations. The year ahead is the last one involving the British who are being pressed to agree to a large bill covering past British EU spending pledges. This is where the UK finds out the real cost of their decision.

And a geo-political trend to watch: Africa is to become the front-line as India and Japan team up to counter China's One-Belt-One-Road initiative which is increasing seen to have imperial designs. This is the opening that Japan and India are using to launch their Asia-African Growth Corridor (AAGC). It is also the sentiment behind the revival of the TPPA, without the US. US leadership in trade matters has very quickly evaporated.

In Australia, their competition regulator has instituted proceedings in the Federal Court against NIB Health Funds, alleging it broke the law by engaging in "misleading or deceptive conduct, unconscionable conduct and making false or misleading representations". At the heart of the case is NIB changing insurance contract benefits and conditions without notifying policyholders.

In New York, the UST 10yr yield is lower at 2.21%. And in a sign of the times, perhaps we should note that Amazon's stock briefly hit US1,000 for the first time today although it has slipped back just below that level now.

The price of oil is a little softer again today with the US crude benchmark is now still just under US$50 a barrel, while the Brent benchmark is now under US$52.

The price of gold is also a little lower, now at US$1,262/oz.

But the Kiwi dollar is going the other way and is noticeably higher today at 71 USc. On the cross rates the Kiwi is at 95.1 AU¢ which is a four month high, and 63.5 euro cents. The TWI-5 index is now at 75.3 and that is its highest since mid March.

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 ».