US slaps trade duties on selected imports; TPP-11 gets final agreement; EU confidence rises; Modi sees three threats; WU fraud claim deadline close; UST 10yr 2.64%; oil and gold up; NZ$1 = 73.4 USc; TWI-5 = 74.7

Here's our summary of key events overhight that affect New Zealand, with news of some big trade actions.

First, today the US Administration apparently started a trade war, formally. It slapped steep tariffs on imports of solar panels and washing machines, part of the promised “America First” trade policy. (Fisher & Paykel's washing machine exports from Thailand are caught, but from New Zealand probably not as they don't exceed the 3% WTO GSP threshold.) And they said it will be the first of a series of trade-enforcement actions in the coming months. China, Korea and Mexico are the main exporters targeted. But analysts say the move will have limited impact, with the detail far less damaging than first appears. Punches have been pulled here. And more of the same (rhetoric-but-no-real-impact) is expected in the NAFTA renegotiation and at the WTO. The Americans are playing to their echo-chambered political base here who are being 'sold'. Professional eyes are on future actions which may or may not have a real impact.

In Japan, the eleven TPP members including New Zealand say they have reached a final agreement - and that includes a now-enthusiastic Canada - and will sign their huge free trade deal in Chile in March, US excluded.

Across the Atlantic, Eurozone consumer confidence rose more than expected and pushing further into positive territory (that is, more optimists than pessimists). They are now at the highest reading in 17 years. Driving this is rising confidence in Germany.

And in Davos, Switzerland, Indian prime minister Modi warned of three major threats; climate change, terrorism, and protectionism. Protectionist-in-chief Trump is also due in Davos.

And an update for customers of Western Union money transfer services (which are available in New Zealand through Kiwibank). The company was convicted of wire fraud by US authorities and agreed to pay its customer-victims US$586 mln. You have until February 18 to file a claim to share in the settlement. Thousands have joined the claims process in Australia.

The UST 10yr yield is down -2 bps to 2.64%. The equivalent 10yr China sovereign bond has dropped -10 bps today to 3.97%. The equivalent NZ 10yr sovereign bond is holding just under 3.00%.

Oil prices are up strongly by almost +US$1.50 to be just under US$64.50 a barrel, while the Brent benchmark is now under US$70.

Gold is up marginally, +US$6 to US$1,338/oz.

And the Kiwi dollar is firmer as well, now at 73.4 USc. On the cross rates it is at 92 AUc and that is almost a +1c gain from this time yesterday, and against the euro at 59.8 euro cents. That puts the TWI-5 at 74.7. And despite the UT trade action, the Chinese yuan strengthened further against the greenback today. That tell you a lot about how markets see the US 'action'.

Bitcoin briefly fell below US$10,000 about eight hours ago but is now at US$11,261 and up +5.7% from this time yesterday. So it is now back to where it was on Monday.

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