Here's my summary of the key events overnight that affect New Zealand with news of wider AML issues at Australian banks.
But first, in the US October retail sales rose at a healthy clip coming in pretty much as markets expected, up +4.6% from the same month a year ago. And consumer prices rose +2.0% in the year to October, also right on market expectations. They are up +1.8% excluding food and energy.
Japan has recorded its longest period of continuous expansion in over 16 years in the September quarter. It grew +1.7% in the year to September. That is up from the +1.4% in the June quarter, but analysts worry that the momentum is slowing, especially for private consumption which slipped from the June quarter and which represents 60% of Japan's GDP. Export growth is keeping the situation positive.
In China, HNA Group has removed the head of its tourism unit, which runs HNA’s flagship Hainan Airlines, in a major leadership reshuffle. Xin Di was ousted as chairman of the unit and as board member of HNA Group. Xin was one of HNA’s founders and joined Hainan Airlines in 1992. HNA has launched an internal probe of its tourism unit, but it isn’t clear what prompted the investigation.
Canada taking US to binding arbitration in NAFTA over its softwood dispute. Canada filed its application to strike down the United States’s punitive tariffs on Canadian lumber and did so under Chapter 19 of the treaty. This is one of the key sticking points in the NAFTA renegotiation wanted by the US: The Trump administration wants to abolish the Chapter 19 panels while Canada has vowed never to give them up. Hesitancy to take on the US seems to have evaporated, especially when an ally as close as Canada does so.
In Australia, the South Australian state government has abandoned their proposed bank tax, and said they will not take the issue into next years election.
And the NAB, the parent of BNZ, says it has ongoing AML issues which may be similar to those at CBA and also get it into trouble with regulator AUSTRAC. "The group is currently investigating and remediating a number of identified issues," NAB noted on page 108 of its annual report. The bank said it had identified "certain weaknesses with the implementation of 'Know Your Customer' requirements and systems and process issues that impacted transaction monitoring and reporting for some specific areas".
Foreign owners of Australian property who leave their homes vacant are set to be charged thousands of dollars a year after the federal parliament passed its vacancy tax legislation. In addition, investors will no longer be able to claim travel expenses to inspect and maintain their properties.
The World Energy Council's 2017 Energy Trilemma Index ranks countries on how well they achieve the energy balance of security, equity and sustainability. With an overall balanced rating of AAB, New Zealand has held on to its 9th position out of 125 countries and is still the best performing country in the Asia-Pacific region, and again the only non-European country in the top ten. Denmark was #1, Australia #33 and down from #31 last year. (However, New Zealand slipped from 7th in 2015.)
In New York, the UST 10yr yield is at 2.34%, -4 bps lower than this time yesterday.
The price of crude oil is now under US$55.50 / barrel, while the Brent benchmark is just over US$62.
The price of gold is unchanged at US$1,278 oz.
The Kiwi dollar is little changed today. We are now just under 68.7 US¢. And on the cross rates we are at 90.7 AU¢, and against the euro at 58.3 euro cents. That puts the TWI-5 index at 71.8.
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 ».