US housing starts weak; consumer confidence rises; Powell sees modest growth; Yellen sees an ignoramus; Aussie coal very profitable; UST 10yr 2.65%; oil and gold little-changed; NZ$1 = 68.9 USc; TWI-5 = 73.2

Here's our summary of key events overnight that affect New Zealand, with news Janet Yellen has lambasted the US President.

But first, data for December American housing starts has come in surprisingly weak. It fell sharply from November and is in fact more than -10% below the same month a year ago. There is a glimmer of hope in the data however; building permits were +0.5% above the year-ago level.

And home prices in 20 key American cities rose in December at their slowest pace in four years, continuing to decelerate as buyers balked at purchases while they assessed future risks.

Consumer confidence however, as measured by the Conference Board, rebounded in February and up strongly after three months of declines. American CEO coinfidence is low however, its lowest in six years.

In testimony at a US Congressional hearing, the Fed boss said their economy will grow at a solid though slower pace in 2019 and the central bank will remain "patient" in deciding whether to further raise interest rates.

And former Fed boss Janet Yellen has been sharply critical of the US President overnight. She said he did not understand economic policy or the US Federal Reserve's purpose. She also said that the current Administration's focus on the US-China trade deficit was misguided.

Yesterday, Asian equity markets couldn't hold any of their previous gains and all fell about -0.7%. The ASX and NZX were down as well. And in afternoon trade today, Wall Street is slightly lower, defying some good overnight gains in Europe (but London was the outlier here, falling -0.5%, although a much larger fall was pared back when it became clearer that Brexit is more likely to be delayed).

In Australia, their largest pure-play coal miner has delivered a stunning financial result, largely on the back of exports to China. Sales were up +67% in 2018 and profits rose almost four-fold - and they were fat in 2017. In 2018 they generated free cash flow of almost NZ$¾ bln. As others reject coal, those remaining are making a killing, and at that rate they probably don't need more equity investment and the social restrictions that come with it.

The UST 10yr yield is at 2.65% after a slip back of -3 bps. Their 2-10 curve is lower too at just on +15 bps while their 1-5 curve is negative -8 bps. It has been negative all year. The Aussie Govt 10yr is down -1 bp to 2.10%, the China Govt 10yr is up +3 bps to 3.21%, while the NZ Govt 10 yr is unchanged at 2.18%.

Gold is marginally softer, down -US$1 at US$1,325/oz.

US oil prices are little-changed at just over US$55/bbl while the Brent benchmark is down to just onUS$65/bbl.

The Kiwi dollar is starting today firmer at 68.9 USc. On the cross rates we are softer at 95.9 AUc. Against the euro we are at 60.5 euro cents. That puts the TWI-5 little-changed at 73.2.

The bitcoin price is marginally softer at US$3,793. 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 ».