US debit limit problems; US growth clouds; China owes the world US$4.8 tln; EU sentiment improves; Aussie power bill shock due; UST 10yr yield jumps to 2.27%; oil unchanged, gold lower; NZ$1 = 72.9 US¢, TWI-5 = 76.6

Here's my summary of the key events from overnight that affect New Zealand, with news of a major bond market realignment underway today.

But first in Washington, which now can't seem to get anything done amid partisan politics, and a Republican Party that seems to be fracturing, progress on revising their debt limit has stopped, and the Congressional Budget Office now says they will run out of funding authority in early October. The same office is projecting sharply wider budget deficits amid static, low growth over the next ten years.

However, the final data for the American first quarter growth is out today and that saw it revised up to +1.4% from +1.2%. That was due largely to a jump in consumer spending, providing a slightly more encouraging outlook for growth this year.

But there are plenty of reasons to believe the current dynamics in the American economy don't bode well for future growth prospects.

There was Chinese balance of payments data out overnight for the March quarter of 2017. Although there were few surprises, they did note that their external liabilities now total US$4.8 tln.

In the EU people and businesses are feeling quite good again. Their economic sentiment indicator has reached its highest level in almost ten years. Consumer sentiment is leading the resurgence.

In Germany, consumer confidence rose in June to its highest level in 16 years. At the same time, data for German inflation showed a quickening pace, and now up to +1.6%.

And it looks like the US is having second thoughts about their TTIP trade deal with Europe. Maybe the TPPA can get resurrected with the US as well​.

In Australia, many businesses and households are about to get a painful surprise when their energy bills arrive in July. There are reports that some will face a tripling of prices. There will be an outcry, for sure.

In New York, the UST 10yr yield is sharply higher yet again today and now at 2.27%. Bond prices are falling as investors seem to be resetting their expectations for the end of QE, and are coming to accept that interest rates are in fact going to rise. The reset is also affecting equity prices today.

The price of oil is little changed today, settling at just under US$45 a barrel, while the Brent benchmark is now just over US$47.

The gold price has slipped again and is now at US$1,243/oz.

And the Kiwi dollar has lost ground as well from yesterday's jump, and is now at 72.9 USc. On the cross rates we are lower as well at 95 AU¢, and at 63.7 euro cents. The TWI-5 index has slipped to 76.6.

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 ».