Here's my summary of the key events overnight that affect New Zealand, with news that a credit card company has started a 'war on cash'.
But first in Washington, Janet Yellen told a Congressional committee she expects forces holding down prices to fade in coming months, allowing the Fed to stick to plans for gradual rate increases. She also confirmed they see the American economy as healthy enough to proceed with plans to begin winding down its massive bond portfolio. But she also said the official interest rate would not have to rise "all that much further" to reach the new neutral level, and signaled one further rise this year.
In its latest Beige Book national survey of American business conditions, the Fed says a shortage of qualified workers has “limited” hiring, but there’s little evidence firms are raising wages to attract them. The Fed judged economic growth was “slight to moderate” from late May through June. That’s a bit less upbeat compared to the May report. The tight labour market, with unemployment near a 16-year low at 4.4%, was frequently cited as a headwind by those surveyed. One reason might be that firms - and especially manufacturing firms - have (or had) a productivity problem.
And staying in the US, credit card company Visa has started a war on cash. It has launched a new trial program where it offers mainly restaurants as much as US$10,000 to upgrade equipment - provided they no longer accept banknotes or coins. Cash transactions can't be mined for fees, so the card companies are working to convince users they are dinosaurs if they accept it or pay with it.
As expected, the Bank of Canada has hiked its policy rate from 0.50% to 0.75% today, it first change in over two years and first rise in seven years. It has also raised its growth forecast for the Canadian economy.
In Europe, industrial output is now growing at its fastest pace since 2011. But it is still not back to 2007 levels.
Back in New York, an appeals court overturned a ruling to force HSBC release a report on its progress to improve anti-money laundering procedures. The Justice Department had required improvements after accusing the bank of being the Mexican drug cartels' preferred bank. HSBC appealed to keep the progress report from being made public.
In Australia, the use of a blockchain has been successfully tested to provide bank guarantees for commercial leases by a consortium that includes ANZ, Westpac, IBM and Scentre Group. They now say it is only a matter of time before the technology is rolled out more broadly, disrupting other industries that rely heavily on paper-based documents, such as insurance.
In New York, the UST 10yr yield has slipped further for a third consecutive day, now to 2.32%.
The price of oil has been stable over the past 24 hours and is still at just over US$45.50 a barrel, while the Brent benchmark is now just on US$47.50.
The price of gold is up by +US$4 to US$1,218/oz.
And the Kiwi dollar has recovered some of yesterday's drop and is now up at 72.7 USc. On the cross rates we are at 94.6 AU¢, and at 63.6 euro cents. The TWI-5 index is at 76.5.
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 ».
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