Here's my summary of the key events overnight that affect New Zealand, with news of housing news from the US, Canada and Australia.
But first, the World Bank says proposed American tax cuts and spending plans could deliver a shot in the arm to their economy and lift growth around the world. However these benefits could all be undone, they said, if America imposes new trade barriers that provoke retaliation by other countries. (See pg 59.)
In the US, there is an emerging trend of house sales failing to close after signed agreements. Oddly, no-one really knows why this trend should be rising at this time. In the December quarter, 4.3% of all sales failed to complete and that is up from 1.4% two years earlier. The problem seems to be most acute in the West. In Tuscon AZ, almost 14% of sales failed in the December quarter, in Ventura County, CA it was 11.6%.
In Vancouver, the craziness in their housing market has taken another turn. The Provincial government is now going to pay the property taxes of million-dollar Vancouver homeowners, and is in addition to last December's decision to offer loans to first-time buyers for down payments. The losers in all this are tax-paying renters, of course.
Remember Australia's scandal over government-funded insulation? And the rorting problems with ours too? Well the US has the same, and is financialising it, subprime-style. Investors there can't get enough of government-backed "energy conscious" loans bundled up into CDO packages. These are now the finance industry's fastest growing loan category. Any government-backed consumer loan scheme just seems to be a honey-pot for financiers who make contractors into loan brokers.
In Australia, property development professionals see its best prospects in two years, driven by expectations of strong growth in residential and office capital values. As a consequence and despite expectations of tighter finance and higher interest rates in 2017, the industry likes what it sees ahead regarding economic growth, and forward work expectations.
And staying in Australia, it is emerging that Fonterra is tightening it grip on troubled infant-formula company Bellamy's. Not only is it getting penalty payments for lower order levels, it has a 'poison pill' clause in place if Bellamy's shareholding changes by 30% or more, allowing it to walk away from supply. Bellamy's has few options at present.
In New York, the UST 10yr yield is falling today and now at 2.34%.
Oil prices are back up +US$1 today following the fall yesterday, now just under US$52.50 for the US benchmark, while the Brent benchmark is now just on US$55.50 a barrel.
The gold price is a little softer today, down -$2 from this time yesterday at US$1,187/oz.
The New Zealand dollar is marginally higher and now at 70.1 US¢. On the cross rates it is holding at 94.7 AU¢, and against the euro at 66.7 euro cents. The NZ TWI-5 index is at 76.5.
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 ».