US PCE inflation low while consumer spending remains solid; S&P500 at new record high; EU sentiment weak; Aussie housing woes extend; UST 10yr 2.54%; oil unchanged and gold down; NZ$1 = 66.7 USc; TWI-5 = 71.6

Here's our summary of key events overnight that affect New Zealand, with news the Aussie housing market is still in its rough patch.

But first, official analysis of the Q1 GDP result shows American consumer spending increased by the most in more than 9 years. Real personal income was up at an annual rate of +2.3% in March while consumption spending was up +2.9% pa. Car buying drove household spending they say, but price pressures are still restrained with their core PCE inflation measure posting its smallest annual gain in 14 months, and year-on-year it is just +1.5%. Although the White House says they want a rate cut, it is hard to see one when growth is good and inflation low. The market is now waiting Thursday's Fed decisions.

Meanwhile the latest regional Fed survey comes from Dallas and their factory index came in quite poor, mirroring the many other similar surveys. Their April general business activity index came in with a score of +2.0 compared to an expected score of +10. In March the score was +8.3.

None of this is worrying Wall Street. The S&P500 is currently at a new record high, up another +0.3% so far today, taking the 2019 gain to +17%. Overnight European markets rose about +0.2% while yesterday Shanghai was down -0.8%, Tokyo was down -0.2% and Hong Kong was up almost +1%. The NZX50 closed just below its record high, cementing in nearly a +15% gain for the year so far.

The OECD is reporting that while employment is rising in member countries but most jobs continue to be created in relatively low-productivity, low-wage activities.

In Europe, business sentiment is on the rack and has been dropping steadily since the beginning of 2018. It is now close to going negative which it last did in 2013. This latest survey data comes after their consumer sentiment survey - which is already negative - is also failing to fire.

In Australia, the resetting of their housing markets is generating some interesting headlines. In Sydney, prices are down almost -15% from their peak and the city's median house price is set to fall below AU$1 mln. In Melbourne which is the country's biggest new-build land market, a year ago the cancellation rate was 1%. In March 2019 it has leaped to 27% as buyers walk away from their deposits. Interestingly, none of their housing market woes are becoming election issues.

The UST 10yr yield is now at 2.54% and up +4 bps from yesterday. Their 2-10 curve is wider at +24 bps and their negative 1-5 curve is narrower at -9 bps. The Aussie Govt 10yr is at 1.82% and up +4 bps, the China Govt 10yr is little-changed at 3.43%, while the NZ Govt 10 yr is also unchanged at 1.93%.

Gold is down -US$7 from yesterday at US$1,279/oz.

US oil prices are little-changed today, now just on US$63.50/bbl while the Brent benchmark is at US$72/bbl.

The Kiwi dollar will open today marginally firmer at 66.7 USc. On the cross rates we are now at 94.5 AUc, a small dip on the day. Against the euro we are little-changed at 59.6 euro cents. That leaves the TWI-5 at 71.6.

Bitcoin is at US$5,148 and that is only marginally lower than this time yesterday. 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 ».