that Germany has decided to suck up the cost consequences, and separate itself from its dependence on Russian oil. It is a move that will fast-track one of the world's largest economies away from fossil fuels. But it doesn't come without high risk.

But first in the US, residential resales fell -2.7% in March from February, a second straight decline and the sales rate is now it’s lowest since June 2020. Higher mortgage interest rates are weighing on this market. But median dwelling prices hit an all-time high of US$375,300 (NZ$552,000).

And mortgage applications fell -5% from the previous week, a 6th straight week of decline, as mortgage rates continue to march higher. The average contract rate on a 30-year fixed-rate mortgage increased to 5.2%, its highest since 2010.

The Fed's April Beige Book survey showed a resilient American economy despite high inflation and never-ending supply chain problems. They report their economy expanded at a moderate pace from February through early April even if there was little respite for businesses from high inflation and labour shortages.

Canada's CPI inflation came in much higher than expected. Analysts were looking for a 6.1% rate in March after a 5.7% rate in February. But it came in at 6.7% and that is a 31 year high. Actually, sharply rising dairy prices played a not-small part of this increase. The Bank of Canada has much work to do to tame inflation there. Join us for the New Zealand March CPI release at 10:45 am this morning, where our market is anticipating a 7.1% rise which for us would be a 32 year high.

China hasn't followed is reserve ratio cut with lower prime loan benchmarks. It kept its benchmark interest rates unchanged for corporate and household loans at its April fixing. The one-year loan prime rate (LPR) was left unchanged at 3.7% following cuts of 5 and 10 bps in December and January, respectively; while the five-year rate was kept at 4.6% after a 5-basis-point cut in January.

Taiwan export orders, which are a bellwether of global technology demand, rose faster than expected in March, setting a new high for the month. But their government warned of much slower growth for April as a consequence of the Ukraine war and ongoing supply bottlenecks.

German producer prices were expected to rise sharply in March, even faster than for February, and their highest in more than 70 years. But those forecasts proved to have under-stated that actual rise which exceeded a +30% rate, almost all driven by sharp increases for Russian fuel. This is steeling them for a complete break from that Russian stranglehold. Overnight their Foreign Minister declared Germany will halve oil imports by July, and take them to zero by the end of 2022. Germany currently buys a quarter of its oil and 40% of its gas from Russia. The dramatic policy shift won't be without some tough costs, but it looks like it is happening, and fast.

In Russia, panicked citizens withdrew foreign currency worth US$10 bln from their accounts in March and banks cut new corporate lending by around one third.

The UST 10yr yield starts today down -7 bps bps at 2.84% and giving up all of yesterday's jump. 

The price of gold starts today down -US$22 since this time yesterday at US$1956/oz.

And oil prices are unchanged at US$102.50/bbl in the US while the international Brent price is down -US$1 and now just on US$106.50/bbl.

The Kiwi dollar will open today up +¾c at 68 USc. Against the Australian dollar we are very marginally firmer at 91.3 AUc. Against the euro we are nearly +½c firmer at 62.7 euro cents. That all means our TWI-5 starts today at 74.1 and +50 bps firmer. We should also note that the Chinese yuan slipped to a six month low against the US dollar yesterday.

The bitcoin price is up just +0.2% from this time yesterday at US$41,440. Volatility over the past 24 hours has been modest at just under +/- 1.4%.