US consumer sentiment jumps; trade deficit narrows; US house prices rise; new grocery disruptor launches; Australia gets its 'Google Tax'; UST 10yr yield at 2.42%; oil and gold up; NZ$1 = 70.5 US¢, TWI-5 = 75

Here's my summary of the key events overnight that affect New Zealand, with news the Aussies have a new aggressive 'Google Tax'.

But first in the US, consumer sentiment pushed on up to a 16-year high in March fuelled by optimism on the jobs front. It is an impressive result. At the same time their trade deficit narrowed in February, although both imports and exports fell marginally. Together, this data suggests that what was thought to be faltering momentum may be back on track. And markets are responding on this basis with the S&P500 up nearly +1%.

Part of that rise in confidence might be the rise in house prices. They rose in January at their fastest rate since mid-2014, a trend that bodes well for sellers but could start to eat into demand as buyers get priced out of the market.

In Seattle, Amazon has opened its first AmazonFresh grocery outlets in a move being watched closely around the world and especially in Australia. The new Amazon Prime service has no lines and no checkouts. The Aussies know it is coming 'soon' and are trying to extract protections for their major grocery chains. (The New Zealand market may be a bit too small to attract Amazon here any time soon.)

And staying in Australia, they now have a 'Google Tax'. In typical Aussie fashion, it is prescriptive law rather than principled law. It gives the tax authorities the right to just declare a 40% tax - on any company, it seems. Except companies owned by foreign governments (like Chinese SOEs, for example). Companies like Fonterra (and many other New Zealand companies) might find themselves taxed in Australia, and New Zealand, for the same income. The new law is in place with bipartisan support responding to community angst. However, as more countries hunt for a greater share of revenue from multinationals, concerns remain that disagreements between global agencies about which nation is entitled to tax profits could spark revenue wars. (New Zealand is taking a different approach to BEPS.)

In New York, the UST 10yr yield is back up a little today and now at 2.42%.

Oil prices are up about US$0.50 to just under US$48.50 for the US benchmark, while the Brent benchmark is still under US$51.50 a barrel. China has cut its retail petrol price for the third time in 2017.

The gold price is up US$2 to US$1,256/oz.

And the New Zealand dollar starts today just a little lower at 70.5 USc. On the cross rates the Kiwi dollar is at 91.9 AU¢, and against the euro is at 64.9 euro cents. The NZ TWI-5 index is at 75.

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 ».