China exports fall, surplus rises; Japan GDP fall in Q4; ECB moves to calm markets; Brazil has credit crisis; UST 10yr yield 1.75%; oil rises; gold drops; NZ$1 = 66.5 US¢, TWI-5 = 71.1

Here's my summary of the key events over the weekend that affect New Zealand, with news China is back working after their Spring break.

But Chinese trade started 2016 on a weak note as January exports declined far more than expected, down -6.6% in the face of weak demand and slower production ahead of the Lunar New Year holiday. But imports also fell, down even more at -14% lower. The net result was a sharp rise in their trade surplus, up to US$63.3 bln for the month.

The holiday break was not a good time for real estate sales in Shanghai. They fell -94%. The reopening of their share market saw modest losses which is somewhat surprising given the trade data. Their currency was fixed modestly higher again in a continuing effort to thwart those trying to short it.

And China's bad loans rose to their highest level in ten years in December.

In Japan, there was a disappointing end to 2015 with GDP falling slightly in Q4. For the year, Japan recorded economic growth of +1.5% even after the Q4 decline. What was especially disappointing was that wages fell, but profits rose, showing that Abenomics is not really on track to deliver anything meaningful. Consumers are understandably reluctant to spend. Their recent and sudden shift to negative interest rates seems unlikely to be enough to do anything meaningful either.

The ECB has tried to calm markets overnight after recent sharp falls in bank share prices. Mario Draghi said he is ready to ease policy further in March, by highlighting risks from financial market volatility, the global slowdown in growth, and low oil prices. He has also defended central bank efforts to tackle low inflation, reinforcing the importance of their 'core mandate'.

The situation in Brazil is going from bad to worse. Bankruptcies are on the rise and Fitch has declared their commercial economy is in a credit crisis.

Wall Street is on holiday (Presidents Day) with the benchmark UST 10yr yield unchanged at 1.75%.

Markets are trading commodities and the US oil price rose, now just under US$30/barrel while Brent is just over US$33.

The gold price fell sharply to US$1,205/oz, down more than US$30/oz.

The NZ dollar still holding. It is still at 66.5 US¢, at 93.2 AU¢, but higher against both the yen and the euro which is now at 59.7 euro cents. The TWI-5 will start today at 71.1.

If you want to catch up with all the local changes on Friday, we have an update here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».