US housing stronger; Japan's economy contracts; EU posts modest growth; China ends devaluation; UST 10yr yield 2.16%; oil down; NZ$1 = 65.8 US¢, TWI-5 = 70.4

Here’s my summary of the key events overnight that affect New Zealand, with news that economic growth seems harder to come by these days.

But first, in the US house builders’ confidence climbed in August to the highest level in almost ten years, while a factory confidence report in the North East surprisingly slumped.

In Japan, their economy contracted in the April-to-June quarter, but managed to perform slightly better than expected. It was down -1.6% in Q2 after the surprising spurt in Q1 of +4.5%. Coming in ‘better than expected’ will ease many worries in Japan, although the Government is expected to re-focus on its ‘Abenomics‘ program.

In Europe, economic growth in their second quarter was up +1.6% on an annual basis, +1.2% for the more limited eurozone. Growth was led by jumps in Spain, Hungary and Sweden, with drag coming from France, Italy and Finland. (Interestingly, Greece posted average growth of +1.4%.)

In China, the official exchange rate rose marginally yesterday, signaling an end – at present – to their ‘devaluation. In fact, it has been a minor adjustment, less than 5% overall. But it sure caused waves internationally. (Part of that is because it came in the northern hemisphere’s holiday season where relatively small changes can cause big waves against a backdrop of low market activity. Things will start to get back to ‘normal’ by the end of next week.)

In New York, the UST 10yr yield benchmark has fallen today, now back at 2.16%.

The oil price is weaker and now under US$42/barrel, and Brent crude is now under US$49/barrel.

The gold price is however a touch higher, now at US$1,118/oz.

The New Zealand dollar starts today slightly higher at 65.8 US¢, at 89.1 AU¢, and at 59.4 euro cents. The TWI-5 is back over 70 at 70.4.

If you want to catch up with all the local 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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var chart_subtitles_arr= ["Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate"];
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// to generate the format for date representation in x axis

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var timestamday = 86400000;
var timestammonth30 = 2592000000;
var timestammonth31 = 2678400000;
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var mm2 = time4.getMonth();
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for(i=0;i

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