Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a slump in dairy prices in the overnight auction.
Overall, prices fell -8.9% in US dollars, down 8.7% in NZ dollars. The GlobalDairyTrade index has fallen below the 1000 mark for the first time since January 2013, and is -35% below its recent February peak. Actually, its -40% below in NZ dollars. These are substantial falls in only 23 weeks.
Leading the race down was wholemilk powder with an 11% drop since the last auction two weeks ago. Skim milk powder was down -7%, but butter and cheese were only down less than -2% each.
Excellent international grain crop harvest forecasts, and the recent fall in grain prices, may be behind the sudden dairy price changes. Payout forecasts of some observers are likely to be lowered later today.
The slump was noticed by the currency markets and the NZ dollar fell -0.5%. More on that later.
But there were other issues that had the focus of currency markets.
US retail sales grew less than expected and business inventories rose more than expected in data released overnight.
At the same time Janet Yellen was giving testimony to the US Congress and she embellished her dovish credentials. She said American labour markets are far from healthy and signaled the Fed will keep monetary policy loose. She said she won't conclude the economy has recovered until wages start rising and discouraged workers return to the labour force.
In China, new credit granted in June topped analysts’ estimates, supporting the view that policy makers there are more concerned about supporting economic growth that reining in their shadow banking sector.
In Australia there has been a backtrack of the earlier warning about a coming major El Nino event. It's no longer due now says their official weather gurus as the tropical Pacific is actually cooling.
And the initial report from the Murray Inquiry into the Australian financial systems was a pretty lame affair.
Our swap rates are higher today and in New York, yields on benchmark UST 10 yr bonds are unchanged at 2.54%. The recent oil price drop has continued at the US oil price is now under US$100 and about US$106 for the Brent benchmark. Gold has dropped sharply again and is now under US$1,300/oz today.
And we start today with the NZ dollar lower this morning against the US dollar and the Yen on the dairy price slump but the change is pretty minor. We are now at 87.6 USc, at 93.6 AUc. The TWI is just under 81.6.
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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