IMF and OECD see global economy improving; Canada housing starts jump; junk bond issuance leaps in Asia; iron ore prices slide; China targets 'spies'; UST 10yr yield at 2.36%; oil up, gold unchanged; NZ$1 = 69.6 US¢, TWI-5 = 75

Here’s my summary of the key events overnight that affect New Zealand, with news hard commodity prices are starting to fall.

But first, the IMF said it sees a more favourable outlook for the global economy this year and next than in 2016, but it has concerns for the intermediate term. Their assessment is broadly similar to that for the OECD.

In Canada, new data out for March shows housing starts their climbing suddenly to a ten year high, and far more than was expected. There is no slowdown in their housing markets, and in fact today’s data is a staggering +25% gain on the same month a year ago.

Companies with junk credit ratings are issuing high yield bonds at twice the rate this year than last. And the real surge is in Asia where issuance jumped to NZ$23 bln from just NZ$2.4 bln. Half of the top six junk-bond deals by value this year are commodities-linked firms. Risk in this sector is heightened, especially in iron ore where prices are sliding. Not only is there a realistic prospect that China will buy less, supplies are being ramped up from Brazil, Australia and China itself. You know it is about to fall when a big investment house says ‘buy’.

Expats working in China will find life that much more challenging. The Chinese government is offering up to NZ$100,000 ‘rewards’ for dobbing in ‘foreign spies’. A financial incentive this large is going to put every foreigner at risk of extortion.

Update: In England, explosive new information about the rigging of the Libor interest rate benchmark has an audio recording of one of the manipulators – the Bank of England itself.

In New York, the UST 10yr yield is slightly lower at 2.36%. Yields are being held back by safe-haven strategies over concerns about the April 24 French election and the tensions in North Korea.

Oil prices are up yet again and now just over US$53 for the US benchmark, while the Brent benchmark is now just under US$56 a barrel.

The gold price is basically unchanged today at US$1,253/oz. There is not much of a boost to the yellow metal from safe-haven strategies.

And the New Zealand dollar starts today a little higher at 69.6 USc. On the cross rates the Kiwi dollar is up to 92.9 AU¢ and against the euro is at 65.7 euro cents. The NZ TWI-5 index is now back just over 75.

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

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

Daily exchange rates

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for(i=0;i

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