Canada house price rises decelerate; China bond defaults rise; India inflation up; blockchain used for LoCs; UST 10yr at 2.99%; oil up and gold down; NZ$1 = 69.2 USc; TWI-5 = 71.7

Here's our summary of key events overnight that affect New Zealand, with news our currency has taken a tumble against all trading partners.

But first, Canadian home prices rose moderately in April as Vancouver hit another record high, but the rate of appreciation continued to decelerate amid softening sales and higher interest rates.

In Europe, markets are awaiting data on Q1 growth in Germany. They think the results will be less than impressive.

In China, reports are surfacing of an increase in defaults by corporates over their bond obligations. The numbers are not huge, up to 15 instances so far this year, a rise from 12 in the same period last year. But what is unusual is that some of these firms now involve local government owned enterprises.

In India, inflation is picking up and is now at +4.6% pa, up from 2.5% in April 2017. Markets are expecting more official rate rises, and that is giving bond investors there some big losses.

We should also note that a trade of soybeans from Argentina to Malaysia last week, one that was unremarkable in every respect, except it was the one of the first, non-test, use of the blockchain for a letter of credit transaction. It all happened within 24 hours, compared to the normal 5-10 day period traditional letter of credit processing takes. The parties involved were HSBC, ING Bank, seller Cargill, and the Malaysian buyer. The blockchain application used in this Cargill transaction is supported by 12 banks, which could help bring the technology to the market more broadly.The annual global use of letters of credit is a US$2 tln market.

And in more crypto news, CBA’s chief financial officer has quit and is off to work for a Hong Kong blockchain firm after less than a year in the role.

The UST 10yr yield is now at 2.99%, up +2 bps. The Chinese 10yr is at 3.71% (unchanged) while the New Zealand equivalent is at 2.73% (down -2 bps).

Gold is at US$1,314/oz in New York. That is down -US$4 today.

Oil prices are up and are now just over US$71 and the Brent benchmark is now just over US$78/bbl. And OPEC is reporting that the high stocks of crude in developed countries have all but disappeared. They claim their production cutbacks have turned the demand/supply situation in their favour.

The Kiwi dollar is very much weaker against all trading partners and now at 69.2 USc, a ½c drop overnight. On the cross rates we are down at 91.9 AUc and 57.9 euro cents. That puts the TWI-5 just under 71.7 and the lowest level this year. The Kiwi dollar has depreciated -1.6% this month alone. The spread of mycoplasma bovis may be behind the sharp drop.

Bitcoin is now at US$8,754 and that is up +1.7% from this time yesterday.

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