Here's my summary of the key events overnight that affect New Zealand, with news the tax noose is tightening on multinational profit-shifting strategies.
But first, President Trump today signed an executive order formally withdrawing the United States from the 12-nation Trans-Pacific Partnership trade deal, following through on a promise from his campaign last year. The US has also announced a 'renegotiation' of NAFTA. Meanwhile, Australia and Japan are pushing ahead with ratification of the TPP. NZ has already done so. It seems there is a determination to do this trade deal, even without the US involvement.
The OECD says tax-haven Bermuda is among a handful of new nations that have finally joined the crackdown on multinationals' tax avoidance strategies, known as Base Erosion and Profit Shifting.
China announced that its arable land area has reduced to 133 mln hectares and that continues to shrink. Despite record grain yields in 2015, overall output shrank after a run of 12 consecutive gains. They are worried and are to set "the most stringent land conservation system ... to protect arable land like a giant panda".
By the end of 2016, Sydney’s median house price climbed more than +10% to a record AU$1,123,991 (NZ$1.2 mln.). The strongest quarterly result over the year was December, with prices up +4.7 per cent in three months. This is a turnaround from a year ago when prices were falling. Momentum from interest rate cuts in May and August and a resurgence of investor activity is said to be driving the Sydney market. Affordability issues are now a top priority for the new NSW Premier.
And in Western Australia, the signing a state agreement with a The Balla Balla Infrastructure Group, to construct a new iron ore export port between Karratha and Port Hedland and construct a 162 km railway linking stranded iron ore deposits in the central Pilbara, is a AU$3 bln project majority owned by NZ's Todd Group.
In New York, the UST 10yr yield actually has fallen sharply today as Wall Street gets the jitters over the protectionist prospects of the new US Administration. It is now at 2.40%. That fall will probably resonate in local markets today
Oil prices are a little lower today, down to just over US$52.50 for the US benchmark, while the Brent benchmark is now just on US$55 a barrel. But notice how NZ pump prices are now over $2/L for U91.
The gold price is unchanged at US$1,210/oz
The New Zealand dollar has moved slightly higher overnight and will open at 72.1 US¢. Actually, against the US dollar, we are now as high as we have been since the November OCR review. On the cross rates we are at 95.4 AU¢, and against the euro at 67.2 euro cents. The NZ TWI-5 index is at 77.5.
If you want to catch up with all the changes on yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».