Trump undermines NAFTA 'progress'; China PMIs improve; China current account surplus modest; Aust regulators diss Xero; UST 10yr 2.74%; oil up and gold down; NZ$1 = 72.4 USc; TWI-5 = 73.7; bitcoin loses 50% in 90 days

Here's our summary of key events over the holiday weekend that affect New Zealand, with news to keep you up-to-date.

In the NAFTA re-negotiations, progress was looking much more likely with the Canadians and Mexicans having figured out Trump. It seems a photo-op claiming a win for US car manufacturers (which may be nothing more than everyone agreeing to pay workers at least US$15/hr) was all this required, and the American's agree to keep the all-important dispute-resolution process. The key seems to be getting Wilbur Ross sidelined and a deal should have been announced later this month. But that was before the President changed his mind to do some random tweeting - triggered apparently by a typically dubious report on Fox News. His negotiators are now thoroughly confused.

China is reporting an unusual and sharp improvement in their official factory PMI, with it jumping more than 100 bps after it fell a similar amount in February. The main reason given is a sharp rise in the production component, itself driven by an even sharper rise in export orders. At the same time it reported its non-manufacturing PMI which showed a nice even rising trend, their more normal style.

And China has reported it had a current account surplus of US$165 bln, or +1.3% of GDP. It ran a trade surplus if +US$141 bln in goods, but ran a deficit of -US$62 bln in services. These overall numbers are tiny in the perspective of the size of their economy and represent about 4 days of trading activity in a year. And they are also small in the perspective of the merchandise trade surplus they run with the US of US$375 bln, which is currently a political hot-potato. (Just don't mention the services trade surplus to the Americans.)

In Australia, their competition regulator has dismissed Xero's ability to support medium-to-large accounting practices, calling them "insufficient and unsophisticated" and not effective competition to MYOB who are seeking approval to buy rival Reckon. On this basis, the ACCC is said to be blocking the deal. It is not a great look for Xero, even if actually Xero HQ does offer al viable alternative, albeit with a different strategic focus.

The UST 10yr yield is at 2.74%. The Chinese 10yr is at 3.78% (up +3 from Thursday) while their 2-10 curve is now just +26 bps and near its 2018 low. While Western 10 yr yields have been sinking, the Chinese equivalent has been holding while their 2 year yield has been rising.

Gold markets are closed but the last quote was at US$1,325/oz in Shanghai.

Oil prices have risen a little with the US benchmark now just under US$65 and the Brent benchmark under US$69.50/bbl.

The Kiwi dollar will start the week up at 72.4 USc. On the cross rates we are at 94.3 AUc and 58.8 euro cents. That puts the TWI-5 at 73.7 and still well in its 2018 range.

Bitcoin has not recovered anything after its sharp slump on Thursday and is now at US$6,756. That is less than half the price it was at the start of 2018 (US$14,741). Recall, speculation drove it to US$19,343 in December, and it was still over US$10,000 just four weeks ago. Also weighing on market sentiment is the impending 'death cross' technical signal, when the 50-day moving average cuts the 200-day moving average from the top, a widely talked-about bear market sign. Such sentiment from under US$7,000 might get ugly.

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