US factory output lower; US confidence up; China housing inflation spreads; AU looks at replacing Stamp Duty; ANZ quits some commodities trading; UST 10yr yield at 2.50%; oil unchanged, gold up; NZ$1 = 70.1 US¢, TWI-5 = 75.2

Here's my summary of the key events over the weekend that affect New Zealand, with news housing pressures in China never seem to end.

Firstly in the US, there was some slightly disappointing data out from the Fed on industrial production and capacity utilisation which both came in slightly lower than expected for February.

However on the positive front, the latest consumer sentiment survey came in better than expected.

In China, house price inflation is spreading. Chinese new home prices, excluding subsidised housing, gained in February in 56 out of 70 cities tracked by the government, compared with 45 in January. Prices climbed in 67 out of 70 cities from a year earlier, compared with 66 in January. The giant southern city of Guangzhou has added more restrictions in another attempt to keep a lid on a problem that baffles regulators.

More than half their 'first-tier' cities have some sort of buying and trading restrictions in place. Yet, a long-recommended introduction of a property tax ("rates") is still off the agenda in China. Even in a one-party state ruled from the top, fear of angry home owners is one taken very seriously - and even though it is distorting their economy badly.

China also has a problem controlling over-capacity in aluminium production.

In Australia, they are looking at replacing their Stamp Duty system with a land tax. It would be politically difficult to deliver, but is regarded as good policy change.

And staying in Australia, ANZ is getting out of trading in base metals, coal and iron ore and electricity because of higher regulatory and capital costs. But it will continue to trade on its own account in precious metals, agriculture commodities and energy.

In New York, the UST 10yr yield ended last week at 2.50%. And the Australasian CDS spreads are now at their lowest level since November 2007.

Oil prices are unchanged at just under US$49 for the US benchmark, while the Brent benchmark is just under US$52 a barrel. A greener energy mix has helped keep energy-related carbon dioxide emissions flat in 2016 new data from the International Energy Agency shows. That is the third straight year that carbon dioxide emissions have not increased and the second of actual (but tiny) reductions in CO2 emissions.

The gold price is up by +US$5 to US$1,231/oz.

And the New Zealand dollar starts today just a little bit higher at 70.1 USc. On the cross rates the Kiwi dollar is at 91.1 AU¢, and against the euro is at 65.3 euro cents. The NZ TWI-5 index will open at 75.2 and in the middle of the tight range it has been in for the past two weeks.

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

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

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2 Comments

Fletchers out of trading halt, EBIT down 110 million from previous update. Reading thru the lines , more bad news will come.

", ANZ is getting out of trading in base metals, coal and iron ore and electricity because of higher regulatory and capital costs"

If this isn't a sign of red tape in an economy - what is?