Here's my summary of the key events over the weekend that affect New Zealand, with news of tax dodgers facing exposure.
But first, the American labour market added 215,000 jobs in March beating most analysts forecasts. That's 5 of the past six months where growth exceeded +200,000, and 9 of the past 12 months. There was growth in just about every domestically oriented sector. The unemployment rate edged up to 5% in March, but that was largely due more Americans joining the labour force. And wages rose +2.3% year-on-year.
Backing up this good data is the widely-watched ISM PMI. It showed that activity in the American manufacturing sector expanded in March for the first time in the last six months, while the overall economy grew for the 82nd consecutive month.
In Europe, tensions between the IMF and Germany are threatening to scuttle the Greek bailout process. Leaks suggest the IMF wants to directly threaten the Germans to choose between Greece or its new sudden commitment to the refugee flood it instigated. The Greeks are very tichy.
In China, they are facing massive spring floods due to the worst El Nino since the 1997/98 weather pattern which wreaked havoc in the Asia-Pacific region. The extreme flooding China experienced almost 20 years ago started at the country’s longest river – the Yangtze – and two major waterways in the northeast. The floods they are facing now could swamp Hong Kong and Macau as Chinese scientists predict the Pearl River Delta may rise by over a metre.
Also in China, Beijing's controlling hand in financial markets has been intensified with their currency agency taking equity stakes in four large financial institutions. This is further 'nationalising' already state-owned banks. They are becoming government departments rather than true trading enterprises. (ICBC has a banking license in New Zealand and its local chairman is Don Brash.)
Closer to home, New Zealand is being fingered as a 'quiet achiever' as a major tax haven. The International Consortium of Investigative Journalists has released its 'Panama Papers' that apparently show New Zealand involved in a relatively minor way in schemes designed to shelter tax by the wealthy. ANZ also gets an 'honorable mention' as a key facilitator. This story will grow over the next few days. The Aussie tax authorities have 800 of their wealthy in their sights. The New Zealand equivalents are yet to be revealed.
In New York the benchmark UST 10yr yield fell further in final trading on Friday and will open the new week at 1.77%.
The oil price is sliding too and is now well under US$37/barrel in the US, while Brent is well under US$39/barrel. Record Russian output undermines the talks about restraint by producers. Most attention has been on the Saudi-Iran spat. It is clear no-one is going to cut output.
The gold price fell as well, down $11 to US$1,223/oz.
The NZ dollar will start today essentially unchanged from where we left it on Friday at 69 US¢, at 89.8 AU¢, and at 60.6 euro cents. The TWI-5 index is at 72.
If you want to catch up with all the local 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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