US dollar sinks; Ford goes electric; EU's big surplus; Canada house sales rise; Fitch warns of unexpected consequences, key UST 10yr 2.55%; oil and gold up; NZ$1 = 73.1 USc; TWI-5 = 74.4

Here's our summary of key events overnight that affect New Zealand, with news Fitch is warning of fallout from the Aussie banking commission that could affect us.

But first, it seems the US dollar is getting the cold shoulder on currency markets. It is lower against most, with the NZD up to 73.1 USc, the highest since before the NZ General Election. In fact, the US dollar is now at a three year low.

In the US, carmaker Ford has become the latest to commit to an electric future. It has said it will invest US$11 bln in the switchover and have 40 electric models in four years.

In Europe, they reported a large trade surplus, but about the level analysts were expecting. It was data that saw the euro rise in value.

In Canada, home sales there in December rose at a faster pace than in November. Volumes were up +4.1%, and prices were up +5.7%.

In China, the thought police are particularly active at present. Any reference by foreign firms to Hong Kong, Macau, Taiwan or Tibet being 'foreign countries' is bringing a swift rebuke and a requirement the companies 'apologise' and delete their references.

They are say they are cracking down in banking industry practices.

Ratings agency Fitch says the Australian Royal Commission into banking there is a fundamental risk to wholesale pricing for the banks, and that could be the case even if the Commission clears the banks, they say. "The reputation of the system is particularly important as the Australian banking sector is heavily reliant on foreign investors for funding. Any loss of trust may lead to higher wholesale funding costs, which in turn could intensify competition for deposits and push up funding costs for the entire system." If they are right, clearly there will be spillover to New Zealand.

The UST 10yr yield is unchanged at 2.55% today because of the US public holiday. However, the equivalent 10yr China sovereign bond has held at its much higher level and is now at 4.02% (-1 bp). The equivalent NZ 10yr sovereign bond is unchanged at 2.89%.

Oil prices are a little higher again today with the WTI benchmark now just under US$65 a barrel, while the Brent benchmark is now over US$70.

Gold however is up strongly, up +US$8 to US$1,341/oz.

The Kiwi dollar is up more than ½c to 73.1 USc on a weakening greenback. On the cross rates it is at 91.7 AUc, and against the euro we are softer at 58.6 euro cents. That puts the TWI-5 at 74.4.

Bitcoin has risen over the past 24 hours by +US$830, to US$14,120, a +6.3% gain. And in Korea, they have found something that will actually stir millennials - more than 200,000 people have signed a petition opposing the crackdown on cryptocurrencies being planned by their central bank. Going the other way, China is among many clamping down tighter on them.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».