Conflicting US jobs signals; US trade gap widens; airfreight trade growing fast; China services sector expands; China dairy co fraud; China tries to 'buy' Aussie politicians; UST 10yr yield 2.18%; oil lower and gold higher; NZ$1 = 71.4 US¢, TWI-5 = 75.6

Here's my summary of the key events from over the long weekend that affect New Zealand, with news of large amounts of Chinese money, firstly going astray in Hong Kong, and separately other money being used to try and buy Aussie politics.

And we have some repeat news items from yesterday, in case you missed them.

Firstly, the US economy added just +138,000 net new non-farm payrolls in May, far lower than expected, and there were a large downward revisions to jobs growth in the previous two months. These figures, coupled with average hourly earnings which grew just +2.5% in the twelve months to May, may prompt the doves at the US Fed to reconsider voting for a rate increase in the middle of next week. But with their unemployment rate falling to 4.3% (which is down from 4.8% at the start of the year and the lowest since 2001), and other data from the report pointing to diminishing labour market slack, most still still expect the Fed to raise rates when they next meet on June 15, NZ time.

A closely-watched survey of the giant American services sector came out overnight and is still very bullish even though it slipped a bit from April. It recorded its 89th consecutive month of expansion with an index level of 60.7. Importantly, the new orders sub-index was strong, and even more importantly the employment sub-index was also strong, and up.

The American trade deficit widened in April as Americans stepped up purchases of foreign goods such as cell phones and equipment. It increased +5.2% from a month earlier to US$47.6 bln. Imports grew +0.8% from March while exports fell -0.3%.

That may have been why global airfreight (as measured by tonne kilometres) grew by +8.5% year-on-year in April, down from growth at the rate of +13.4% in March. The healthiest region was the Asia-Pacific, with North America a laggard.

Meanwhile, global passenger air travel grew by +10.7% year-on-year in April – the fastest pace in 6 years. But travellers aren't going to the USA in the numbers they once did - their US1.6 tln tourism industry is learning the downside of having a dopey President.

In China, activity in their services sector expanded at the fastest pace since January thanks to strong growth in new orders. It offset some recent unexpected weakness in manufacturing. Their services PMI rose to 52.8 in May from April's 51.5. A similar uptick, powered by new orders, was recorded in India.

And one of China's largest dairy companies says it is in trouble after someone senior absconded with most of its cash. This is a company with about NZ$6 bln in assets. About NZ$0.5 bln in cash is missing, as is Miss Ge Kun who was in charge of its treasury function. This crisis opens up a major realignment opportunity in the China dairy industry.

In Australia, first it was nib who are accused of changing product terms without first informing customers. Now it is Optus, a phone and broadband supplier admitting to the same behaviour.

Worse, the Aussie spy agency is warning its major political parties about taking donations from two high-profile Chinese businessmen because they may be a conduit for Chinese Communist Party interference in Australian politics. And a former Australian trade minister walked straight out of parliament last year and into an AU$880,000 a year job with a billionaire closely aligned to the Chinese Communist Party and its key trade policy. Democracy is under attack and subversion from everywhere.

In New York, the UST 10yr yield is lower at 2.18%.

The price of oil is a softer again today with the US crude benchmark is now just under US$47.50 a barrel, while the Brent benchmark is now under US$49.50.

The price of gold is higher and now at US$1,279/oz.

However, the Kiwi dollar is pretty much unchanged today at 71.4 USc. On the cross rates the Kiwi is at 95.4 AU¢, and 63.5 euro cents. Against the British pound, we are up to 55.3 pence. The TWI-5 index is now at 75.6 and that is still its highest since mid March.

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 ».