US consumption up, inflation at 2%; Mexico grows faster; China PMIs stable; German retails sales slip; EU readies retaliation on US tariff decisions; UST 10yr at 2.95%; oil up, gold down; NZ$1 = 70.4 USc; TWI-5 = 72.6

Here's our summary of key events overnight that affect New Zealand, with news the US is pushing the EU and China together with its capricious trade and tariff activity.

But firstly, Americans’ spending regained momentum in March while their incomes continued to grow, a sign consumers could drive better economic growth this year. But that will depend on a rise in incomes, which wasn't reflected yet in this data, although it is expected to show up soon. (Income growth has been relatively smooth over the past year while the expenditure data is more changeable.) The data out today also shows inflation hitting +2% in the US, up from +1.7% in February. That is a 17 month high. The US Fed will be reassured by this data.

In Canada's west, the real estate market there is mirroring New Zealand. Vancouver is coming off the boil, only to be replaced by resort-town Whistler. This situation seems much like Auckland and Queenstown.

The Mexican economic growth rate rose in the first quarter of 2017, expanding at its fastest pace since late 2016 as industrial production recovered and their service sector grew faster. The result beat expectations.

China's official PMI readings, based on a survey of about 3000 large, mainly state-owned enterprises, showed little change. The factory measure was down slightly probably as a result of the trade spat with the US. The services sector was up marginally. The expansion levels in this survey are quite moderate. And as it typical for official Chinese statistics, the results don't stray much month-to-month or from the official narrative.

German retail sales unexpectedly fell in March, marking a fourth consecutive drop and dampening cheer around a consumer-led upswing in Europe’s biggest economy. German inflation came in unchanged at +1.6%.

The EU is preparing to respond to the unilateral American decision to impose tariffs on steel and aluminium products which come into effect at at about 5pm NZT today. China and the EU are lining up against American trade policies.

The UST 10yr yield is now at 2.95% and down -1 bp. The Chinese 10yr is at 3.65% (unchanged) while the New Zealand equivalent is at 2.89% (down -2 bps).

Gold is at US$1,318/oz in New York. That is down -US$5 today.

Oil prices however are a little higher today at just over US$68.50 and the Brent benchmark just over US$75/bbl. The fast fall in the availability of crude oil from Venezuela is affecting market supplies. (And an indication of power corruption in Washington is coming to light with a billionaire supporter of President Trump gaining hardship relief for an oil refinery he owns to avoid having to make clean-air improvements to his facility.)

The Kiwi dollar is starting today down at 70.4 USc. On the cross rates we are at 93.4 AUc and 58.3 euro cents. That puts the TWI-5 on 72.6, and that is its lowest level in five months.

Bitcoin is unchanged at US$9,320 and taking a pause from its usual volatility.

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