US data supportive; Canada housing starts fall; German investors less negative; China car sales drop; Aussie drought bites crop estimates; UST 10yr at 2.98%; oil up sharply, gold unchanged; NZ$1 = 65.1 USc; TWI-5 = 69.1

Here's our summary of key events overnight that affect New Zealand, with news Aussie farmers are facing tough drought conditions.

But first, data out of the US on job openings and wholesale trade was uneventful, just cruising along at unchanged and quite modest levels and certainly not changing the rising growth narrative.

Wall Street is pushing ahead, up modestly today as a risk appetite stays in the market.

In Canada, there was disappointing housing start data released for August. New dwelling construction is trending lower, which will hold up house prices in many major urban centres.

But in Mexico, industrial production rose in July more than expected.

And still there is no news of a resolution to the US-Canada talks as part of the overall NAFTA update package.

In Germany, analysts were less negative in September about economic sentiment and in the current environment, that is being seen as a 'win' in the influential ZEW survey.

In China, the heavy hand of censors is reaching into financial news as well. A major news service has been 'temporarily shut down' because of its reporting of the trade war between the US and China. Unless it understates the risks, reporting on the subject is banned.

And staying in China, car sales dropped -4.8% in August in a particularly sharp reduction that was quite unexpected.

In Turkey, a country at the core of the emerging market stress fault line, they reported Q2-2018 growth at +5.2% pa, sharply lower than the Q1-2018 rate of 7.4% and before the August stress really hit hard. It is pretty clear that their currency woes are nowhere near over.

In Australia it is becoming clear that this year's drought will be a harsh one. It has been twelve years since the last major drought there, but the 2018 version will be seem worse because it comes off the back of a multi-year string of some excellent seasons. This time, the main effects will be in Queensland and NSW (and will therefore get more news coverage). Their bright spot this time is in Western Australia.

The UST 10yr yield is higher at 2.98%, a +4 bps gain in a day. Their 2-10 curve is tighter at just under +23 bps. The Aussie Govt 10yr is at 2.58% (unchanged), the China Govt 10yr is at 3.69% and up +2 bps, while the NZ Govt 10 yr is at 2.60%, also up +2 bps.

Gold is little changed at US$1,196/oz in New York.

US oil prices are up sharply and now just over US$69/bbl. The Brent benchmark is also higher, now just on US$77/bbl. These are gains of almost +US$2/bbl, driven by a sudden turnaround in supply sentiment as traders realise how hard the Iran sanctions are going to hit the flow of crude.

The Kiwi dollar is starting today a little lower again at 65.1 USc. On the cross rates we are at 91.7 AUc, and at 56.2 euro cents. That puts the TWI-5 at 69.1 and a new low since October 2015. 

Bitcoin is marginally lower at US$6,201. In the US a federal judge has ruled that their securities law can be used to regulate cryptocurrencies. This price is tracked in the currency charts below.

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