US housing starts slip; factory output up; Canada factory output up; Japan shrinks; UK calls for accounting firm breakups; Aussie wage growth tame; UST 10yr at 3.10%; oil up and gold unchanged; NZ$1 = 69.1 USc; TWI-5 = 72

Here's our summary of key events overnight that affect New Zealand, with news benchmark interest rates are still rising.

But American housing starts fell in April from March, and to much lower levels than expected, signaling factors such as rising material and construction labour costs are holding down home building despite solid buyer demand. But they are still almost +11% higher compared to April 2017. Building permit growth showed less variation.

Meanwhile, American industrial production increased solidly in April, up +3.5% from the same month a year ago amid an acceleration in both manufacturing and mining output. But that is lower growth than the +4.5% pa recorded in April 2017.

North, Canadian manufacturing rose more than expected in the March quarter, but at a much slower growth pace than the December quarter.

Japan's economy shrank in the first quarter of 2018 for the first time in two years, ending the longest stretch of economic growth since the 1980s. The world's third largest economy contracted at an annualised rate of -0.6%, official data showed. Weak consumption came at a time Japan's export engine is in transition. The weakness is not expected to last long.

There were no surprises in the latest report on EU inflation; it is plodding along at a low +1.2% rate.

In the UK, there are calls to break up the major accounting firms, including KPMG, EY, Deloittes and PwC. They are accused of being inherently unable to perform their roles properly of being an outside independent challenge to corporate management, unable to identify strategic corporate failings. They have been called a "cosy club".

In Argentina, their currency and debt crisis has receded just a little bit. It has managed to refinance all of the US$26 bln of peso-denominated securities, known as Lebacs, that are set to expire this week. And it raised another US$200 mln. But the interest rates for achieving this ranged from 40% for the 36-day Lebac to 38% for the 154-day note. The pressure is not over yet. Turkey is another emerging economy that is on the ropes. Together, they have the capacity to roil the international financial system, triggered by fast rising US interest rates. Some big investors are losing some big money on these problems. But not all emerging market economies are caught up in this.

In Australia, wage growth data came in much weaker than expected. Their hourly rates of pay rose +2.6% in the year to March, but only +2.1% if bonuses are excluded. That's the second weakest rise in 20 years. Bonuses make up a larger portion of private sector pay than public sector pay across the ditch.

The UST 10yr yield is now at 3.10%, up +2 bps today. According to some analysts, it is on its way to 3.50%. The Chinese 10yr is at 3.72% (unchanged) while the New Zealand equivalent is at 2.82% (up +5 bps).

Gold is staying low at US$1,291/oz in New York, uchanged today.

Oil prices are up again and are now just over US$71.50/bbl in the US and the Brent benchmark is now just over US$79/bbl.

The Kiwi dollar has recovered some of its weakness and is now at 69.1 USc. On the cross rates we are up almost +1c at 92.8 AUc and ½ c at 58.4 euro cents. That puts the TWI-5 just on 72.

Bitcoin is now at US$8,319 and that is down -2.3% from this time yesterday.

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