Wall Street stops falling; US confidence sags; US budget track exposed; Canada and China react to US tariffs; China warns to 'prepare for the worst'; UST 10yr at 2.88%; oil leaps, gold sinks; NZ$1 = 68.5 USc; TWI-5 = 71.9

Here's our summary of key events overnight that affect New Zealand, with news trade reactions to American moves are starting to be felt everywhere.

But first, Wall Street is calmer today with equities posting small rises from yesterday.

But new data out shows American consumer confidence has faded a bit in June, with households increasingly pessimistic about their short-term income prospects. Analysts said this suggests an apparent rise in their economic growth in the June quarter was unlikely to last.

The American Congressional Budget Office is warning that the sharp, sudden run-up in their Federal Government debt will mean that the US taxpayer will be paying as much for interest in 30 years as it does then for Social Security retirement payments, themselves rising fast. Essentially, its not sustainable and something will have to give - or break.

And an update to the Case-Shiller Home Price Index shows that gains edged lower in April, a sign that rising US mortgage rates may be putting slight downward pressure on what consumers are able and willing to pay for homes.

Canada is readying quotas and tariffs on imports of steel, necessary they say because the American steel tariffs open the door to a potential flood of cheap imports.

In China, they may have slapped tariffs of US soybean exports in retaliation for arbitrary American tariff actions, forcing American companies to seek markets elsewhere. But now China has cut tariffs on soybean imports from five countries, to zero. Competitive tariff moves like these will change the patterns of trade.

And a senior Chinese economy minister is warning that growth in his country will slow in the second half of 2018. He says firms should prepare for "the worst" as both domestic demand slips and trade frictions with the US escalate.

In Australia, new solar rooftop installations have reached a record high in May with more than 130 megawatts installed in the month, continuing a trend of monthly record installations. At this rate Australia will have a third of its power generated from renewable energy in two years. That is a sharp rise from just under 20% now, emphasising the speed with which new installations are going in. But their base-load capacity remains a serious issue and fine-weather-dependent capacity is not building resilience.

The UST 10yr yield is little changed at 2.88%. The Chinese 10yr is at 3.60%, down -1 bp, while the New Zealand equivalent is now at 2.93%, unchanged. The New Zealand swaps curve will start today lower and flatter.

Gold is down sharply today, down -US$9 in New York, at just US$1,258/oz. That is its 2018 low.

Oil prices are racing higher in the US by nearly +US$2.50/bbl today with the US price is now just on US$70.50/bbl. The Brent benchmark is up strongly too at US$76.30/bbl. Together with our much lower exchange rate, this has the potential to bring NZ$2.20/ltr petrol on a discounted basis.

The Kiwi dollar will start today just 68.5 USc and down -½c from this time yesterday. On the cross rates we are at 92.7 AUc, and 58.8 euro cents. That pushes the TWI-5 down to 71.9 and its lowest level of the year.

Bitcoin is down -1.3% today at US$6,169. It is off its recent lows, but is struggling to gain any upward momentum.

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