Here's my summary of the key events overnight that affect New Zealand with news of some impressive action to protect the tax base in most countries.
Firstly, there is little data out in the US today, but one survey is worth a mention - the NY Fed's Empire State manufacturing survey. This is strongly positive, reaching levels not seen for at least three years, with optimism based on accellerating order and employment growth.
The OECD is reporting that there has been surprisingly quick and broad-based action by governments to protect their tax base. Governments have dismantled, or are in the process of amending, nearly 100 preferential tax regimes as part of the OECD/G20 BEPS standards "to improve the international tax framework". That is of 100 jurisdictions and 164 preferential tax agreements.
Regional tensions in both Spain and Iraq are festering. The Spanish authorities have given Catalonia until Friday to abandon their independence aspirations, which seems unlikely, so trouble is brewing there. And the Iraqi forces are moving into Kurdistan, which also has the potential to become a serious global flash-point in coming days.
China's consumer price inflation came in at a tame +1.6% for the year to September. But their producer prices are rising in a worrying way. Producer output prices rose by +6.9% in the year to September, but their input prices rose far faster, up +8.5% in the same period. This pattern has been going on for a year now and it is hard to see how it can be sustained. Capacity cuts, driven in part by a new zeal to tame pollution, may be behind the trend. However, in reaction, China's 10 yr bond yield is starting to rise, now up to over 3.70%, the highest it has been in more than 3 years. But at least their curve is steepening.
China has also announced that its grain output will be a "bumper" 600 mln tonnes in 2017. But that is spin, because it is lower than the 616 mln tonnes in 2016, itself lower than the 621 mln tonnes in 2015. China says it wants self-sufficiency in these core crops, but clearly it has issues. Consequently, China will be a an increasingly larger buyer on international markets
In Singapore, home sales fell in September as developers marketed fewer projects in a month. Developers sold 657 units last month, down from 1,246 in August, according to Urban Redevelopment Authority data released Monday. That’s the lowest sales since January. But there may also be cultural reasons why sales were unusually low in September.
Local star fintech Vend has pulled off a bit of a coup in Australia, getting its services integrated with CBA's Albert payments tablet.
In New York, the UST 10yr yield is now at 2.29%.
The price of crude oil is up again today and now just under US$52 / barrel, while the Brent benchmark is just under US$58. And there is a report that China is offering to buy 5% of Saudi Aramco, a move said to give Saudi Arabia more options in its planned float of the world's biggest oil producer on stock markets. It is a move India will be watching with some concerns.
The price of gold is also a little higher, now at US$1,303oz.
And the Kiwi dollar will start today pretty much unchanged at 71.8 US¢. On the cross rates we are higher at 91.4 AU¢, and at 60.8 euro cents. Our TWI-5 index is now at 74.4.
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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