Dairy auction stable; US factory activity slows; steel tariffs delayed for some; US car sales drop; Canada growth up; Aussie mortgages harder to get; UST 10yr at 2.97%; oil and gold down; NZ$1 = 70.1 USc; TWI-5 = 72.6

Here's our summary of key events overnight that affect New Zealand, with news the giant US economy is sagging noticeably.

But first, the overnight dairy auction saw prices fall -1.1% in US dollar terms of a rising greenback, but they were up +3.6% in New Zealand dollar terms. SMP and cheddar cheese prices both rose more than +3% in US dollars, butter was unchanged, but WMP prices slipped -1.5%. Volumes were similar to the previous auction. There is nothing in here that will change the milk payout forecasts. Looking back, prices on this platform have been remarkably stable now for over 18 months.

American factory activity slowed for a second straight month in April although still at a healthy expansionary level, but manufacturers are worried about higher prices as fallout from the Trump administration’s tariffs on steel and aluminium imports.

Those tariffs were delayed by one month for Canada, Mexico and the EU, but no-one else, when they came into effect yesterday. New Zealand and Australia are caught along with everyone else. Even those who gained the reprieve are ticked-off at how all this is being handled.

Higher tariffs are not going to help American carmakers either, or their customers. Those carmakers posted lower new vehicle sales in April as consumer demand continued to weaken and competition intensified. GM no longer releases monthly data but analysts said their results may be down -8%. Ford said its sales were down -4.7%. Fiat/Chrysler had a +5% rise, although the consumer portion was down -1%. Nissan suffered a -28% thump, Toyota a -4.7% drop and Honda a -9.2% decline. All manufacture vehicles in the US. American construction spending fell as well. None of these results will aid their manufacturing sector activity, and with steel prices going up sharply, the slowdown might be quite fraught.

Wall Street thinks so; stocks are lower today with the Dow down -0.7% at one point, although a late recovery may be underway. The greenback is rising in a risk-off mood and the wait for tomorrows Fed meeting results.

In Canada, their February economic growth picked up, hitting +3% pa and that was quite a bit higher than analysts were expecting.

China is on its almost-week-long May Day holiday break. It is a time of very heavy internal travel. But that has allowed a major car maker there to release its first quarter results and they were poor.

We are also seeing a slowdown in growth in India.

In Australia, 28% (of 40) surveyed senior executives believe that bribery and corrupt business practices "are common in industry", almost double the proportion holding that view in other developed countries. One particular issue in Australia was booking revenue too early to meet sales targets, where a quarter said they would accept that.

And also in Australia, ANZ is saying the new standards flowing from their Royal Commission into Financial Services will mean that mortgages will be harder to get, more applicants will be treated as 'marginal', and the whole process will take longer. Whether Australian practices swill flow over to New Zealand is uncertain, but it has to be a possibility

The UST 10yr yield is now at 2.97% and up +2 bps. The Chinese 10yr is at 3.65% (unchanged) while the New Zealand equivalent is at 2.82% (down -7 bps).

Gold is at US$1,306/oz in New York. That is down -US$12 today driven by a rising US dollar.

Oil prices however are lower today, down more than -US$1 at just under US$67.50 and the Brent benchmark just over US$73/bbl.

The Kiwi dollar is starting today down at 70.1 USc also on the stronger US dollar. On the cross rates we are marginally stronger at 93.5 AUc and 58.4 euro cents. That puts the TWI-5 on 72.6, which is unchanged from yesterday.

Bitcoin is at US$8,984 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 ».