Dairy prices disappoint; fewer US consumers expect to be better off; China current account surplus dives, WTO warns on trade slowdown; UST 10yr 2.66%; oil stable and gold jumps; NZ$1 = 68.9 USc; TWI-5 = 73.3

Here's our summary of key events overnight that affect New Zealand, with news of more evidence of a worldwide trade slowdown.

But first, today's dairy auction brought overall prices only marginally firmer, with a +0.9% gain in US dollars. The key WMP price was virtually unchanged. This will be something of a disappointment after the futures market signaled another good rise. Even more of a disappointment is that the result in New Zealand dollars is actually a decline because the Kiwi dollar has strengthened in the past two weeks. So in local currency we have recorded a -0.4% slip. Still, prices are still up +20% since early December. However, farm gate milk price indications are unlikely to get updated based on today's auction.

In the US, a national survey run by the NY Fed reveals American consumers expect to spend +2.8% more money in 2019 than they did a year ago (+2.3%). The same survey reports the share of households expecting to be better off a year from now fell to 38.6%, the lowest level since November 2016.

In China, they reported their 2018 current account surplus down -70% year-on-year to a record low of US$49 bln. But that was actually better than expected. In the March quarter of 2018 they recorded a current account deficit of -US$29 bln followed by two subsequent tiny surpluses. The fourth quarter result was stronger than expected, bolstered by strong exports.

And China is going backwards in its fight against air pollution. And that is the official news. Air pollution levels were up more than +8% in January compared to the same level a year ago in a national survey of more than 300 Chinese cities.

In Europe, 'Brexodus' is gathering pace with two large UK financial firms gaining official approval to move significant operations out of London, following US and EU banks.

Through all this, Germany’s 2018 current-account surplus was the world’s largest for the third year in a row.

Internationally, the WTO is warning a global trade slowdown is underway as one of their key indicators has hit a nine-year low.

The UST 10yr yield has dipped -2 bps to 2.64%. And their 2-10 curve has also slipped to +14 bps. The Aussie Govt 10yr is down -2 bp at 2.12%, the China Govt 10yr is up +1 bp at 3.13%, while the NZ Govt 10 yr is up +2 bps at 2.26%.

Gold is up sharply today by +US$14 to US$1,339/oz.

US oil prices are unchanged at just on US$56/bbl while the Brent benchmark is holding just over US$66/bbl.

The Kiwi dollar is up at 68.9 USc. On the cross rates we are also holding high at 96.1 AUc, and firmer at 60.7 euro cents. That puts the TWI-5 at 73.3.

Bitcoin is also higher at US$3,932 which is a +1.9% gain on the day. This rate is charted in the exchange rate set below.

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