Here's my summary of the key events from overnight that affect New Zealand, with news the price of bitcoin has taken off in the past week, accelerating up in the past 24 hours.
But first (in the real world), the OECD is reporting that growth in their seven core economies slowed in the first quarter of 2017. But year-on-year the composite growth is holding at +2% pa.
In China, another area of strong growth is lottery sales. They now exceed NZ$10 bln per month and are growing at +10% per year. Sports lotteries are rising +15% per year.
And in a sign of a strong protectionist preference for its domestic industry, China is nearly doubling its tax on imported sugar. Saying that an investigation had found that imports have seriously damaged China’s sugar industry, it said the tax on imports beyond the first 1.95 mln tons a year will be raised to 95% from the current 50%, effective immediately The Belt and Road initiative is for pushing China's products out to the world, not so much the other way, it seems.
In Europe, Portugal has become the latest bailed-out euro zone country to receive a clean bill of health from the European Commission after its budget deficit fell to -2% of GDP last year. This brings it well below the EU limit of -3% and allows it to exit the Commission's excessive debt procedure.
In Australia, now two banks have estimated the tax impact on them of the new penalty on their five big banks. Firstly, Westpac said it would cost them AU$280 mln in the first year. Now CBA says it will likely cost them AU$220 mln. These estimates are not likely to impress the Aussie treasurer who was planning to raise over AU$6 bln from this tax on their five largest banks. And yesterday S&P cut the ratings of 23 Aussie financial companies, but spared the big banks, perhaps another signal that the new tax won't shake their profitability materially.
In New York, the UST 10yr yield is marginally higher today at 2.25%. The yield inversion (5-10) in China got even steeper overnight going from -3 to -7 bps. That is a quick move. It is just as pronounced on the 2-10 curve.
The price of oil is slightly firmer today. The US crude benchmark is now just over US$50.50 a barrel, while the Brent benchmark is just over US$53.50.
Gold is unchanged however at US$1,252/oz.
Meanwhile, the Kiwi dollar is a higher again and is now at 69.9 USc. On the cross rates the Kiwi is at 93.5 AU¢, and 62.2 euro cents. The TWI-5 index is at 74.1, a ten day high.
And bitcoin broke up through the US$2,000 for the first time overnight, taking its month-to-date gain to +55%. In fact, the price right now is over US$2,200. The rise-and-rise can partially be explained by high demand in China, and that Japan recently allowed it to be legal tender there. Being up +10% on the day is just a way of saying it is in a bubble frenzy.
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 ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.