Wall Street rebounds; dairy prices unchanged; US car sales rise, NZ tops out; Williams gets NYFed job; China raises subsidies for local food; UST 10yr at 2.78%; oil up and gold down; NZ$1 = 72.6 USc; TWI-5 = 74

Here's our summary of key events overnight that affect New Zealand, with news equity markets are recovering on Wall Street, up more than +1% as we near the close.

But first, the overnight dairy auction was another tame affair with overall prices reported as down -0.6%. That may be true, but all the main components rose, except SMP which fell another -1.8% and AMF which was down -7%. The volume was a light 17,222 tonnes and probably over 90% of that was Fonterra product. (It was 93.9% at the March 20, 2-018 auction.) This volume offered and sold was the smallest since April 2013. WMP prices rose +1.6%, cheddar cheese was up +2.2% and butter was up +4.1%. But all these changes were less in NZ dollars because the Kiwi currency also rose quite strongly overnight, up about ½c. The main takeaway from today's event is that these price changes are not going to alter milk payout forecasts.

In the US their car market bounced back in March after a weak February. Of the majors, GM posted a +16% sales gain, Ford was up +3.4% and Fiat/Chrysler up +13%. Toyota and Hyundai were both up +4% while Nissan fell -4%. Overnight we also got New Zealand new car sales data and those were down -2% from the same month a year ago and a clear plateauing at record high levels. SUVs now account for 62.7% of all passenger car sales. Commercial vehicle sales were up +7.3%.

In New York, the systemically important regulator, the New York Federal Reserve as appointed John Williams to its top job. Williams had been president of the San Francisco Fed. The New York position makes him a permanent and powerful member of the Federal Open Market Committee (FOMC).

As the Chinese impose their retaliatory tariffs on selected American products, mainly food related, a senior IMF official said China needs to address the way it trades and that more countries than the US have concerns about the way it works trade markets. But away from the limelight, China is increasing its subsidies for selected agricultural crops, especially those it imports from the Americans. New Zealand officials will have noted how China's limited response is using food imports as their weapon of choice.

The Australians had their normal monthly official interest rate review late yesterday and kept things unchanged at 1.5%.

The UST 10yr yield has recovered strongly today and now up at 2.78%, a gain of +5 bps. The Chinese 10yr is at 3.75% (unchanged) and the New Zealand 10 yr is at 2.75% (+2 bps).

Gold is down -US$10 to US$1,333/oz.

Oil prices have stopped falling today and are up by +US$0.50/bbl with the US benchmark now just over US$63.50 and the Brent benchmark just over US$68/bbl. China has cut its resource tax on shale gas production to 4.2% and down from 6% in a bid to increase domestic natural gas supplies.

Our currency is up more than ½c today and now at 72.6 USc. On the cross rates we are also firmer at 94.5 AUc and 59.2 euro cents. That puts the TWI-5 back at 74 but still in its 2018 range.

Bitcoin has recovered and is now at US$7,478 which is a +7.1% gain over the past 24 hours. Locally, that puts the price back over NZ$10,000.

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