Equity markets dive; many central bank reviews with most downgrading growth; China credit stress; Fitch likes New Zealand; UST 10yr at 2.77%; oil dives, gold jumps; NZ$1 = 67.7 USc; TWI-5 = 72.2

Here's our summary of key events overnight that affect New Zealand, with news prospects are turning a bit grim with investors in retreat after the US Fed disappointed the doves.

On Wall Street, markets are in no mood for risk with the S&P500 down a further -1.5% in early afternoon trading today and benchmark bond yields are falling. This follows -1.5% to -2% losses in most European markets overnight. Yesterday Shanghai was down -0.5% and Hong Kong closed a full -1% lower. Tokyo was down an eye-popping -2.8% while the ASX fell -1.3%. The NZX's small rise was certainly an outlier.

There have been a whole bunch of central banks reviewing official interest rates overnight. The Japanese kept their unchanged following the Indonesians and the Philippines, Thailand raised their's by +25 bps, and the British decided on no change. Almost all of them pared back their growth forecasts for 2019 - except Japan. Sweden also 'raised' rates, but what makes this special is that it 'raised them in the negative, from -0.5% to -0.25%. Mexico raised its rate by +25 bps to 8% this morning.

In China, there are growing signs of credit stress, especially in the corporate world and especially among property developers. And the official crackdown on capital flows is limiting the ability of their corporates to do large deals. And small business in China is fearful of taking on more debt.

Back in the US, the possibility of a Federal government shutdown has suddenly returned. The losing, departing Republicans seem to want to leave a poison pill.

In the EU, Deutsche Bank, Credit Agricole, Credit Suisse and another bank have been charged by competition regulators for being in a bond trading cartel.

And here is some good news, a ray of sunshine; ratings agency Fitch is raising its growth forecasts for New Zealand in 2018 and 2019, the opposite tack to the one ANZ took yesterday.

The UST 10yr yield is now at 2.77% in a major selloff after the Fed announcement yesterday. Their 2-10 curve dropped even more, down -8 bps to just on +10 bps. The Aussie Govt 10yr is at 2.35%, down -4 bps, the China Govt 10yr is at 3.34% and also down -4 bps, while the NZ Govt 10 yr is at 2.36% and down -11 bps from the double-whammy of the Fed and our own gloomy growth data. Local swap rates followed and have fallen dramatically with the two year down -7 bps and that makes -10 bps since the start of the week. The ten year is down -12 bps over the same week.

Gold is higher again and is now at US$1,261, another +US$8 rise today. That makes it a +3.5% rise since the beginning of the month which is a lot for gold. (However, it is still down -4% since the start of the year.)

US oil prices have resumed their sharp falls today, down about -US$2 to now just on US$46/bbl. The Brent benchmark is now under US$55/bbl. Not only is there too much supply, there are growing worries that demand will slide.

The Kiwi dollar is a lot lower today after the Fed rate hike, down more than -½c to 67.7 USc. Our weak GDP data didn't help either. On the cross rates we are at 95.2 AUc, and at 59.1 euro cents. That puts the TWI-5 at 72.2.

Bitcoin has had another large gain overnight, rising more than US$250 or +7.0% to US$4,078. This rate is charted in the exchange rate set below.

Although this is the final 90@9 for 2018, we will be publishing a holiday briefing every business day over the summer break. See you there.

This chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».