US Fed remains 'patient' in rebuff to Trump; job gains strong; construction weak; key factory data weak; China population near peak; AU banks want APRA relief; UST 10yr 2.49%; oil unchanged and gold up; NZ$1 = 66.2 USc; TWI-5 = 71.1

Here's our summary of key events overnight that affect New Zealand, with news China's population growth is slowing faster than most researchers thought.

But firstly, the US Fed has completed its monetary policy review, leaving the key rates unchanged. The decision was unanimous. And it is re-using the term 'patient' as it works through competing economic signals and pressures from the American economy with a backdrop of an impatient US Administration.

Elsewhere, the ADP employment report suggests this Saturday's official non-farm payrolls report will be a good one. Almost all sectors (eight of ten) show employment gains.

But the early reports from carmakers suggest sluggish sales and below analyst estimates for April. Fiat Chrysler US deliveries fell more than -6% (in Canada they fell -10%), Ford's fell almost -5%, and Toyota dipped -4.4%. GM doesn't report monthly sales anymore but is unlikely to buck the trend. Higher interest rates on car loans is said to be a factor with buyers now paying more than a 6% rate on average. We should get New Zealand car sales data later today.

US factory activity slowed to a 30 month low in April amid a sharp drop in new orders. And construction spending unexpectedly fell in March to a level below that for March 2018. Both sets of data suggest the Q1-2019 +3.2% growth rate was an anomaly.

In Canada, their government raised the level of emergency loans farmers can take out to weather the trade stoush with China over Hauwei, where China retaliated by stopping purchases of canola.

Yesterday was a public holiday in many parts of Europe and in China, so market data is slim there.

But a new report about China's demographics says China is almost now at peak population. They say the peak will come much earlier than their previous forecast and will occur in 2023, just four years from now, at 1.4 bln. China's falling birth rate may stabilise but their death rate and emigration rate is still rising. The changes are likely to decrease the number of children and infants and the consumer markets for them.

In Australia, banks are feeling the pinch from APRAs serviceability restrictions that say borrowers must be able to handle a 7.25% repayment interest rate. And they are campaigning for that to be relaxed. (It's crimping their earnings.)

The UST 10yr yield is now at 2.49% and down -1 bp from yesterday. Their 2-10 curve is still at +24 bps and their negative 1-5 curve is at -10 bps. The Aussie Govt 10yr is at 1.76% and down -4 bps, the China Govt 10yr is unchanged at 3.42% (because Shanghai was on holiday), while the NZ Govt 10 yr is down -5 bps at 1.88%. Local swap rates tumbled a similar amount yesterday as well.

Gold is up another +US$6 from yesterday and now at US$1,286/oz.

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

The Kiwi dollar will open today softer at 66.2 USc after the US Fed policy statement. On the cross rates we are now at 94.4 AUc, a small dip. Against the euro we are softer at 59.1 euro cents. That decreases the TWI-5 to 71.1.

Bitcoin is at US$5,312 and that is +1.2% higher 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 ».