Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a commodity price shift that has big implications for New Zealand.
Early this morning the latest GlobalDairyTrade dairy commodity auction has seen another fall, and an increasing large fall in prices. In US dollar terms prices fell 8.9% but in NZ dollar terms it was even more fierce; they fell 9.1% in our local currency. This is the third large fortnightly fall in a row bringing the drop to 19% in US dollar terms since mid February and a whopping 26% in New Zealand dollar terms.
Since the last auction just two weeks ago, milk powders have fallen between 8.5% and 9.5%, and butter has fallen 11%. These are major movements, accentuating a worldwide drop on soft commodity pricing that started with soybeans, and is being helped by weaker orders from China.
Volumes offered are unchanged from two weeks ago but they are almost treble what they were a year ago. Prices are now 21% below the year ago levels.
Curiously, our exchange rate has not yet reacted, which heightens the drops in local currency.
In other news, US manufacturing continues its expansion. The widely watched ISM index expanded to a very healthy 53.7.
In China, their official factory PMI rose fractionally and still records expansion, even though two other private surveys suggest manufacturing is contracting in China.
In Australia, the RBA held its cash rate target at 2.5% and said a longer period of interest rate stability is what they are now settling in for.
Gold fell to below US$1,280/oz overnight, UST benchmark 10yr bond yields are at 2.75%, and the oil price fell about US$2/barrel. Stocks rose to record levels on the S&P500 in New York in afternoon trade.
Incidentally, BusinessDesk is reporting that the NZ Commerce Commission is looking at possible manipulation of our currency market indexes.
The NZ Dollar starts today at 86.5 USc, the Aussie is at 93.6 AUc, and the TWI remains at 80.8.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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