Here's my summary of the key events from overnight that affect New Zealand, with news of some surprisingly adventurous policy moves in the Australian Federal budget.
Their government will impose AU$23 bln in tax hikes on banks and foreign investors in a bid to ‘reset the budget’.
For that money, they have announced a 10-year "nation-building program" that is set to create tens of thousands of construction and support jobs in a range of major projects. Firstly a new AU$5.3 bln a new company to build and operate a second airport in Sydney by 2026 will be a fully Federal project. Then a new project to connect Melbourne and Brisbane by a 1,700-km inland rail line will be funded. The government will also acquire outright ownership of, the Snowy Hydro scheme. That will unlock funds for New South Wales and Victoria states to reinvest in other infrastructure.
In housing, first-time home buyers will receive a tax cut on deposit savings up to AU$30,000.
And Australia's five biggest banks are being hit with a new levy on liabilities that will raise AU$6.2 billion over four years. From July 1, ANZ, Westpac, National Australia Bank, Commonwealth Bank and Macquarie will face a 6 bps levy on customer deposits above AU$250,000, corporate bonds, commercial paper, certificates of deposit and Tier 2 capital instruments. And a new body, the Australian Financial Complaints Authority, will be tasked with resolving disputes customers have with their bank, and banks will face fines of as much as AU$200 mln for misconduct.
And finally, developers will be barred from selling more than 50% of any new residential project to foreign investors. The government will also introduce a so-called "ghost house" tax of $5,000 on foreigner investors who fail to occupy or lease a property for at least six months of the year.
Elsewhere in the world, the focus is back on HNA Group and its shady, opaque ownership. It has raised eyebrows by increasing its stake in Deutsche Bank to 9.9%, something that was today welcomed by German regulators.
In New York, the UST 10yr yield has risen yet again and is now at 2.41%. (And the VIX volatility index is settling in comfortably below 10, indicating 'fear' is low in markets these days. In addition, Australasian investment grade corporate debt CDS spreads have fallen to their lowest level since late 2007.)
The price of oil is trending down today. The US crude benchmark is now under US$46 a barrel, while the Brent benchmark is under US$49.
It is the same story for gold, but it is down more sharply and now at US$1,214/oz.
The New Zealand dollar is slightly softer as well at 68.9 USc as the greenback is moving up. On the cross rates the Kiwi dollar is at 93.8 AU¢ and 63.3 euro cents. The TWI-5 index is at 74.1.
We should also note that the price of bitcoin, that just recently rose sharply to over US$1,500, has today surged on higher to well over US$1,700.
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 ».