Markets in dour mood; US data generally average; traders question China stimulus; ship orders fall; Australian data weak; UST 10yr 2.59%; oil and gold unchanged; NZ$1 = 66.8 USc; TWI-5 = 71.4

Here's our summary of key events over the weekend that affect New Zealand, with news markets aren't as happy now the Easter holiday is over.

Although we were on holiday yesterday, most Asian markets weren't. Tokyo closed flat while Hong Kong was closed. Shanghai took it on the chin yesterday, dropping -1.7%. In turn, that was because of fears Beijing will wind back its stimulus. And this morning, Wall Street is barely able to find any direction or enthusiasm, trading flat in the afternoon session.

In the US, the latest update to the Chicago Fed's National Activity Index is a dull affair with the latest data slightly worse than expected but still better than in February.

Existing home sales fell -5% in March, despite falling mortgage rates, and median prices are up only +3.8%. The industry claims the weak market is because there are not enough houses available for sale especially at the cheaper end of the market. About half of all homes sold within a month. It is a puzzle as to why this demand pressure isn't raising prices. It is a national puzzle that may say something about American confidence in housing.

It is not all negative. Retail sales in the US were up much more than analysts were expecting, posting a +1.6% month-on-month annualised gain in March when half that was expected. That is most of the +3.6% gain from the same month a year ago. However, given that US inflation is +1.9%, this is a modest real rise in retail sales.

And their inventory-to-sales ratio surprised by not getting worse.

But US new housing start data wasn't so good for March, down a concerning -15% from the same month a year ago.

And the early look at April business activity in the US shows it's growth is slowing sharply. In fact, that is now at a 31 month low driven by their giant services sector. Output, new orders and hiring all show sharp pullbacks.

This downtrend is supported by the Philadelphia Feds regional index which also came in way below expectations. It declined to a reading of 8.5 in April from 13.7 in March. This index was at 32.3 in May 2018. so it has come a long way off.

Over the border to the north, Canadian retail sales data also brought a stronger-that-expected rise in February data released overnight. But to be fair, most of this rise is accounted for by inflation.

Trade over that border is supposed to be subject to the new updated NAFTA. But a new official review casts doubt on the likely benefit for the US and that may reinforce the trouble the Administration has getting Congressional consent. Apparently its not a great deal at all for the Americans, even if it is for Mexico and Canada.

Both the IMF and OECD have warned China that excessive stimulus could undermine the country's attempts to deal with financial risks. But after better than expected growth in Q1, expectations are raised that Beijing will now go ahead with important structural reforms and it is resilient enough to put up with the short term adjustment costs.

However China has lost a key WTO ruling in a dispute with the US over tariff levels for wheat, rice and corn which it continues to protect. And the only indication coming out of Beijing is that stimulus support will remain, but may be scaled back.

Globally, ship orders have fallen to their lowest level in 15 years although those for LNG gas tankers are a bright spot.

In Australia, a ray of hope for their manufacturing sector. After declining for a many months, the latest PMI data shows it expanding again. But overall business activity indicators have "deteriorated more seriously" than indicators on employment, according to the latest quarterly NAB Business Survey.

Just how stressed their apartment industry is has been revealed by new data on what developers are paying agents to try to get potential buyers over the line with a sales transaction.

The UST 10yr yield has drifted up by +3 bps over the holiday weekend and is now at 2.59%. Their 2-10 curve is firmer at +20 bps but their negative 1-5 curve is little-changed at -7 bps. The Aussie Govt 10yr is at 1.95% and up +3 bps, the China Govt 10yr is also up +3 bps to 3.42%, but the NZ Govt 10 yr hasn't followed these others and is unchanged at 2.00%.

Gold is marginally softer at US$1,274.

US oil prices are a lot firmer today, now just over US$65.50/bbl while the Brent benchmark is just over US$74/bbl. And that is a +US$2 rise on an American statement they are set to tighten the screws on Iran by ending waivers for its sanctions on the country.

The Kiwi dollar is weaker at 66.8 USc. On the cross rates we are at 93.6 AUc. Against the euro we are at 59.3 euro cents. That puts the TWI-5 at 71.4.

Bitcoin is at US$5,365 and a gain of +2.7% overnight. In local currency, the price of bitcoin now exceeds NZ$8,000 which is its highest point since mid November 2018. 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 ».