US housing start weaken; Fed's Beige Book downgrades; Canada inflation dips; China ponders next moves; IMF sees better balance; Fitch trims AU bank outlooks; UST 10yr yield at 2.12%; oil down & gold up; NZ$1 = 67 USc; TWI-5 = 72.3

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Here's our summary of key events overnight that affect New Zealand, with news the northern summer season is now starting and markets might get a little thinner.

First on Wall Street, equities are lower today after railroad profit warnings that the trade war is undermining rail traffic volumes.

Also, US housing start data came in weaker, and weaker than expected even if they are +6% higher than the same month a year ago. But new residential building permits were almost -7% lower than the year-ago level, so the outlook looks a little grim.

And mortgage applications slipped last week, while US mortgage rates turned a little higher.

All of this is consistent with the latest US Fed Beige Book report that says their economy is now just running at a "modest" level, which is a downgrade from the "modest-to-moderate" wording used in the past.

In Canada, their CPI inflation rates slipped from 2.4% in May to 2.0% in June, but this was as expected on lower petrol prices. Without petrol, it rose to +2.6%.

But Canadian industrial output growth came in below expectations with a +1.6% gain.

In China, steelmakers reported that first-half profits dropped sharply due to surging iron ore prices, sliding steel prices and tighter production restrictions on factories.

Office buildings in China's top cities now have vacancy rates that are surging as demand is unable to keep up with much higher supply, due to economic downturn, US-China trade tensions and the deleveraging campaign in the financial sector. The vacancy rate for Grade A office space in Beijing climbed to more than 11% in the first half of the year, the highest level in eight years, according to Colliers. And, they say, it might rise to 16% by the end of 2019.

China's leaders are off to a summer retreat to ponder their next moves on their economy and the trade war.

The IMF is now pointing out that China is no longer a net lender to the world, with its trade and investment levels basically in balance. The only distortion is that the US can't seem to stop sourcing from China. The IMF's core point is that this improvement has reduced global financial risk.

In the South China Sea, tensions are rising again with the Philippines asking for US help to counter Chinese incursions into its waters.

In Australia, Fitch has downgraded the ratings outlook for both ANZ and Westpac, shifting its 'stable' outlook on their AA- rating to 'negative'.

The UST 10yr yield is now just under 2.06% and -6 bps lower than this time yesterday. Their 2-10 curve is holding on to its steeper shape, at +23 bps, and their negative 1-5 curve is at -12 bps. The Aussie Govt 10yr is down -4 bps at 1.38%. The China Govt 10yr is also unchanged again at 3.19%, while the NZ Govt 10 yr is actually up +1 bp at 1.64%.

Gold has jumped +US$14 overnight to US$1,421/oz.

US oil prices are falling today on trade and growth fears. They are now down more than -US$1 to US$56.50/bbl. And the Brent benchmark is down a similar amount at US$63.50.

The Kiwi dollar is stronger yet again today, now up to 67.4 USc. On the cross rates we are also up, now just over 96 AUc. Against the euro we are up at 60.1 euro cents. That puts the TWI-5 up at just on 72.3.

Over the past 24 hours, the bitcoin price has stayed below US$10,000. It is now at US$9,752 and little-changed from this time yesterday. The 24 hr volatility has been +/- 4.3%. The bitcoin 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 ».