Here's my summary of what's happened around the world overnight that affects New Zealand.
International investors are spooked by the make-up of our next government being in the hands of Winston Peters. While the New Zealand dollar under-performed yesterday, it has rallied back a little overnight. ANZ economists are watching to see whether the policy uncertainty impacts business and consumer sentiment.
Angela Merkel is also trying to build a government further to the German election over the weekend. Yet talking to the business friendly Free Democrats and pro-regulation Greens, which are at odds over issues like migration, tax and the environment, Merkel has a tough task ahead of her. The emergence of the Greens as powerbrokers has weighed heavy on markets.
Wall Street is down as the war of words between North Korea and the US continues. North Korea’s foreign minister says Donald Trump has effectively declared war on the state, so it reserves the right to shoot down US bombers even if they’re not in its air space. The White House has just dismissed North Korea’s suggestion as “absurd”. This latest exchange was sparked by Trump tweeting the North Korean leader “won’t be around much longer”.
The European Central Bank is increasingly confident inflation will rise to its target. However its president Mario Draghi is calling for patience, as a “substantial degree of monetary accommodation” is still necessary. He singles out currency volatility as a source of uncertainty.
Finally, Chinese authorities have taken what we may consider extreme measures to fight property market speculation. Several second-tier cities have just announced bans on the sale of houses within two to three years of purchase. Altogether, more than 40 Chinese cities have reportedly introduced these measure since March.
In New York, the UST 10yr yield has fallen to 2.23%.
The crude oil price has risen to US$52 a barrel, while the Brent benchmark is up to US$59.
Safe haven gold has jumped to US$1,306/oz.
The New Zealand dollar has fallen to 72.8 US cents, 91.5 AU¢, and 61.4 euro cents. The TWI-5 index is down 4bps to 75.1.
If you'd like to catch up with all the changes from yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».