US inflation rises, Fed sees more; US budget deficit jumps, Ryan quits; China car sales rise; NAB inside job; RBA sees 'shock'; UST 10yr at 2.79%; oil and gold up; NZ$1 = 73.6 USc; TWI-5 = 74.7

Here's our summary of key events overnight that affect New Zealand, with news the growing US budget deficit has claimed a major scalp.

Firstly however, American consumer prices fell marginally in March from February because of a brief drop in the cost of petrol, but underlying inflation actually picked up. The overall index is up +2.4%. Prices rose +2.1% if you exclude fuel and food and that is the fastest rise in this measure in 13 months.

In Washington DC, all of the US Federal Reserve's policymakers felt that the American economy would firm further and that inflation would rise in the coming months, minutes of the central bank's March policy meeting showed.

Meanwhile, the US Federal Government's budget woes are getting worse. In the fiscal half year to March, they recorded a deficit of US$0.6 tln which is +14% higher than the same period the previous year. The March result alone is +18% worse. Irresponsible tax cuts depressed revenues while spending rose. And it will only get worse from here. It was too much for the Republican leader of the House of Representatives, Paul Ryan supposedly a fiscal hawk, who announced his retirement.

In China, the pace of car sales is rising after a relatively slow start to the year. Sales in March were up +4.7% from a year earlier, a sharp acceleration from the +1.7% pace of January and February combined.

In Australia, the NAB chief executive's chief of staff, Rosemary Rogers, is under investigation for a major fraud on the bank involving property investments and millions of dollars. Tax authorities are seizing her assets, including a trophy home.

And staying in Australia, the head of their central bank says the next move in official interest rates will almost certainly be up, even if it won’t come for a while, but it “will come as a shock” to some borrowers because there hasn't been a rise in over seven years.

The UST 10yr yield is a little lower today, now at 2.79%. The Chinese 10yr is at 3.75% (up +2 bps) and the New Zealand 10yr is at 2.81% (-1 bp).

Gold is up +US$11 to US$1,350/oz.

Oil prices are up again today by more than +US$1, with the US benchmark now just under US$67/bbl and the Brent benchmark just over US$72/bbl. This is its highest in more than three years and comes after Saudi Arabia said it intercepted missiles over Riyadh and international tensions about Syria grew.

Our currency is little changed since this time yesterday at 73.6 USc. On the cross rates we are at 94.9 AUc and 59.5 euro cents. That puts the TWI-5 at 74.7.

Bitcoin is up slightly to US$6,908 which is up less than +1% from this time yesterday.

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