US new house sales fall, prices rise; US and EU PMIs strong; US border trade booms; Indonesia cuts policy rate; UST 10yr yield at 2.18%; oil and gold up; Germany repatriates gold; NZ$1 = 72.2 US¢, TWI-5 = 74.7

Here's my summary of the key events overnight that affect New Zealand, with news economic growth seems to be happening at a good level worldwide.

In the US, sales volumes of new single-family home unexpectedly fell in July, dropping to their lowest in seven months while prices rose more than expected at +6.3% pa matching the rise in prices we saw in existing home sales, and raising concerns of a slowdown in their housing markets. New home sales activity there represents a bit over 9% of total housing market sales activity.

Also out today is the flash US PMI data. That shows a slowdown in expansion in their factory sector in August, but a rise in expansion in the much larger services sector, in fact to a 28 month high. (Good expansion in the Eurozone is also being reported. Even EU consumers are feeling more confident.)

On their borders, the renegotiation of NAFTA is now well underway. But today, both Mexico and Canada dismissed the American threat to scrap the trade agreement as a shallow negotiating tactic.

And speaking of borders, monitoring of sea trade at the US port system shows volumes rose to near record levels in July.

Indonesia’s central bank surprised most economists yesterday by lowering interest rates, reflecting its relative comfort with the currency and inflation outlook. The benchmark rate was cut by a quarter point to 4.5%.

In New York, the UST 10yr yield is sharply lower today, now at 2.18% and dropping. Markets are increasingly spooked by the comments coming out of the White House, especially the cavalier ones regarding the debt ceiling and the prospect of a Government shutdown.

The price of oil is up again today and now just over US$48.50 a barrel, while the Brent benchmark is at US$52.50.

The price of gold is up +US$3 to US$1,289/oz. And we should note that Germany has repatriated half its gold, all from France, the rest from New York where it was while there was a threat from the Soviet Union. This offshore holding has long been a source of conspiracy theories, but the German authorities say the volume and purity repatriated is perfect.

And the Kiwi dollar will start lower again today at 72.2 US. On the cross rates we are also lower at 91.4 AU¢, and at 61.1 euro cents. As a result that puts the TWI-5 index at 74.7 and that is its lowest level since May.

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 ».