Here's my summary of the key events overnight that affect New Zealand, with news a crackdown is coming in Australia on capital gains tax concessions for property investors.
But first, January retail sales data was strong in the US. They rose +5.6% above the same month a year ago and more than expected as households bought electronics and a range of other goods, pointing to sustained domestic demand that should bolster American economic growth in the first quarter. Also assisting the positive view, business inventories were +2% higher in December than the same month a year ago.
But that is actually lower than the rate of price inflation which has come in at +2.5% pa in January. This CPI data is now running at its highest level since February 2013 and underpins the US Fed's recent signals that they are on track for three rate hikes this year. Financial markets haven't believed the Fed's dot plots recently, so there may be some reassessments going on about now.
It is not all rosy news however; industrial output was unchanged in January compared with the same month a year ago.
In China they are back singing from the old economic script. In January they approved more 18 large fixed asset investment projects with investment totaling NZ$31 bln as they try to "stabilise economic growth by boosting infrastructure investment". It was lower than the NZ$37 bln investment approved in December but higher than the monthly average of NZ$29 bln reported for 2016.
In Australia, their Federal government is deep in deficit and is looking at ways to return to surplus. Many options are blocked by uncooperative States. But one getting renewed focus is a crackdown on capital gains tax concessions for property investors. It is understood the policy being worked on will not apply to investments such as shares and nor will it wind back negative gearing, which is a major rort in the Aussie property market.
In New York, the UST 10yr yield is sharply higher on the US inflation data, now up at 2.51%.
Oil prices are essentially unchanged today and still just over US$53 for the US benchmark, while the Brent benchmark is just under US$56 a barrel. In the US, they installed a record 14.6 gigawatts of generating capacity in 2016, almost double the total from 2015 and enough to make photovoltaic panels the country's largest source of new electric capacity for the first time. Solar panels on rooftops and fields accounted for 39% of new generation and that beat the 29% contribution from natural gas and 26% from wind. There is a substantial revolution going on there, and it doesn't involve Trump's coal - at all.
The gold price is marginally higher today and now at US$1,224/oz.
And the New Zealand dollar is higher this morning as well. It is now at 72 USc. On the cross rates we are at 93.6 AU¢, and against the euro at 67.9 euro cents. The NZ TWI-5 index is at 77.5.
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 ».