Here's our summary of key events overnight that affect New Zealand, with news China needs to create a huge number of new jobs just to sustain social stability.
Firstly however, today's dairy auction was a mixed affair. In a low volume event, the lowest on offer in the last 45 events, overall prices were down -1.2% in US dollars with sharp falls for SMP which was down -8.6% where a quarter of the auction volume was. But more than half the volume was in WMP and that price actually gained in USD. At the same time the NZD is weaker, so overall prices actually rose +0.3% in local currency with WMP prices in NZ dollars up +1.2%. It could have been worse; the derivatives market signaled that WMP prices would fall -4.2% and that didn't happen. Soon, Fonterra will announce its half year result and will no doubt be quizzed on its China status and we will have full separate coverage of that.
In Washington, almost below the radar these day, a now normalised frenzy is taking place to fund their Federal Government. The current funding runs out this weekend and disagreements over health-care policy, immigration and funding for a crucial New York rail tunnel project drag on. Before them is a plan to just keep things going until October. In an age of extreme partisanship and silly brinkmanship (mainly by a juvenile Administration), this pattern is now normal. But at some point, it will blow up in their faces.
In China, their electricity consumption was up more than +13% in the first two months of 2018. That compares with a +6.6% gain in the same period in 2017. Such raw data is a good indicator of real activity.
They need this growth because they need to create 11 to 13 mln new jobs this year. Their working-age population will grow by more than 15 mln people, farmers are still flocking to their cities, and graduates are pouring out of their universities at an increasing rate. In addition, cutbacks in industries with severe overcapacity also need to find new work. China is on a jobs-creating treadmill at present.
A closely-watched survey of German business confidence fell sharply and unexpectedly in March. The sentiment index fell to +5.1 this month from +17.8 in February. That was compared to the consensus forecast for a reading of +13.1.
Meanwhile, the EU's own survey of consumer sentiment showed it holding at a relatively high level.
In a United Nations survey, they have rated New Zealand the eight happiest place on earth, the same rank as 2017. Finland is now #1. We rank just behind Canada, and well ahead of Australia (#10 and slipping), the US (#18, also slipping) and the UK (#19, slipping as well)
In New York, the UST 10 yr yield is higher today at 2.88%.
The gold price is down -US$5 and now at US$1,312/oz.
Oil prices are about US$1.50/bbl higher today and now at just under US$63.50/bbl and the Brent benchmark now just under US$67.50/bbl.
The Kiwi dollar will start today lower at 71.9 USc. On the cross rates we are lower as well at 93.5 AUc and at 58.7 euro cents. That puts the TWI-5 at 73.2.
Bitcoin is now at US$8,852 which is a gain of another +5.6% on top of yesterday's +12% jump.
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