Here's our summary of key events overnight that affect New Zealand, with news markets are stable even if one key policy maker isn't.
Firstly, analysts have been delving into the mystifying bullying by the US of Canada. And nothing seems to make sense. The US does have a small annual goods deficit in trade with Canada - tiny actually - but it does also have a small annual surplus in services trade with Canada. The net is a surplus, in the US' favour, and that is based on the US's own data. On dairy, the trade is even clearer - the US runs a surplus with Canada. Facts aren't 'alternative' from Washington, nor are they absent. They are however rejected for some fact-free crazy narrative.
Japanese machine tool orders leaped +14.9% in May in preliminary data, on top of the +9.6% gain in the final data released for April. These are substantial improvements in that sector and bode well for future Japanese export trade.
And staying in Japan, their government has committed to investing NZ$70 bln into the "Indo-Pacific region". This comes as the US pulls back and China rushes to take advantage.
Japan may be a key player in a post-US trade world to balance out the equally unpalatable Chinese one. If NAFTA skids, the Mexicans are extending their options. The CTTP will also be a key institution.
In India, fears of higher inflation are growing again. Consumer prices are expected to rise +4.8% in May, driven up by sharply higher petrol costs. Their central bank recently raised their policy rate to 6.25% and there are concerns it may have to go higher still. All this is a concern because it is a reversal of some recent progress that was thought to be essential to stabilise the basis of their rapid expansion.
The rise in fuel prices is not just a concern in India. In China, truck drivers are protesting the same thing. Protests are unusual and very risky in China.
Around the world overnight, equity markets have been in positive territory. Not hugely, but positive all the same.
The UST 10yr yield is at 2.96%, up +1 bp since yesterday. The Chinese 10yr is at 3.67% (down -2 bps) while the New Zealand equivalent is now at 3.01%, down -1 bp.
Oil prices are little changed today and the US price remains just over US$66/bbl. The Brent benchmark is now just over US$76.50/bbl.
Gold has hardly moved and is still hovering at US$1,299/oz.
The Kiwi dollar will start today marginally softer at 70.2 USc. On the cross rates we are also a bit softer at 92.3 AUc, and 59.6 euro cents. That puts the TWI-5 at 73, and really, very little changed since yesterday.
Bitcoin is still at US$6,719 which is unchanged from yesterday. Traders are having issues understanding the implications of the South Korean hack.
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