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Fed sees US expanding but housing up less than expected; China growth slows but better than expected; NZ$1 = US$0.863 TWI = 80.1

Fed sees US expanding but housing up less than expected; China growth slows but better than expected; NZ$1 = US$0.863 TWI = 80.1

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that China's growth rate is slowing.

American economic activity in most of the country has picked up noticeably in recent weeks from earlier weather-related slowdowns according to the US Fed's Beige Book released this morning.

However a separate Commerce Department report showed housing starts haven't bounced back quite as strongly as expected from the winter doldrums. But they were up +2.8%.

Janet Yellen was speaking overnight and she said the American economy was slowly moving toward their full employment targets, but that it would need help from the central bank for some time yet.

Late yesterday, data was released showing China’s economy grew at the annual rate of 7.4% in the first quarter of 2014, a slowdown from 7.7% growth in the previous quarter but faster than the 7.2% pace that some analysts had expected.

Still, that slower growth has markets wondering whether the Chinese authorities can tolerate the tensions it will bring and some are positioning themselves for new stimulus measures.

UST benchmark 10 yr bond yields rose sightly in trading today in New York and are now at 2.64%. The oil price is unchanged and gold has just tweaked itself above US$1,300/oz in a minor gain.

Equities are up in mid afternoon trade.

We start today with the NZ dollar lower at just over 86.3 USc, 92.0 AUc and the TWI is now at 80.1.

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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4 Comments

New Zealand's tax system heavily penalises KiwiSaver while offering massive tax breaks to property investors and needs to change, says savings lobbyist the Financial Services Council.

 

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=112…

 

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What would you suggest, are you thinking of tax re the asset or tax re the funding structure of the asset?

Would you include something for local and non-resident owners either physically or tax?

Or would you like taxbreaks for kiwisaver.

 

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Example:

1.Have mortgage want to buy shares.

Open bank account, borrow and buy shares.  Interest on shares tax deductiable.

or Borrow and buy rental.  Interest tax dedcutible.

2. Have mortgage and also kiwisaver

Funds come straight out of bank account to KS.  Funds no longer available to reduce mortage.

But cannot claim any interest on the kiwisaver - unlike1.

 

 

 

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