US housing starts rise; US sentiment up; Canada housing sales slip; ECB and Lativian central banker in corruption scandal; ASIC mulls action on dodgy advice; UST 10yr at 2.87%; oil up and gold down; NZ$1 = 73.8 USc; TWI-5 = 74.8

Here's our summary of key events over the weekend that affect New Zealand, with news an EU central bank boss has been detained in a corruption investigation.

But first, American housing starts got off to a great start in January (and that is in the depths of a very cold winter), rising +7.3% above the same month a year earlier and the third month in a row it has risen. The annual rate is now up to 1,326,000 which is an extra 96,000 houses over the December annual rate. The jump may both ease housing price pressures that are rising +5.6% pa, and is big enough to register a boost to the country's economic growth. Some also suggest the rise may restrain rent increases.

The latest indicator of consumer sentiment in the US also showed gains. It rose in early February to its second highest level since 2004 despite lower and much more volatile stock market prices. The analysis of the results is worth reading because within the rise are some important shifts in the basis of the optimism; job security factors are rising, attractions to short-term discounts and low costs are falling.

We should note that tomorrow is a public holiday in the US, Washington's Birthday. (It is a holiday that came to be known as President's Day, but in the age of Trump, has reverted to its official name.)

In Canada, new mortgage-qualification rules that came into force in January have taken the gloss off Canada's housing market. Buyers had rushed to make purchases in December to beat the deadline and sellers sat tight while assessing the fallout. But the impact may not have been as strong as some had feared. Sales volumes were down -2.4% year-on-year while average prices were up +2.3% on the same basis.

In Europe, the head of the Latvian central bank has been detained on corruption charges. He is also an ECB governing council member. It is unknown what the issues involved are at this point, although there have been issues in the past at Latvian banks around transfers to North Korea.

In Australia, their new head of regulator ASIC, James Shipton, made his first public appearance before a Canberra oversight committee on Friday. One of his urgent tasks will be to figure out how to enforce proper standards at major 'wealth managers' after ASIC recently found "in 75% of the advice files reviewed ... advisers did not demonstrate compliance with the duty to act in the best interests of their clients. Further, 10% of the advice reviewed was likely to leave the customer in a significantly worse financial position."

In New York, the UST 10yr yield has resisted climbing higher and is now at 2.87%, down -2 bps on the day.

The gold price is lower by -US$4 this morning at US$1,347.

Oil prices are a little firmer today with the US benchmark now just over US$61.50/bbl and the Brent benchmark over US$64.50/bbl.

The Kiwi dollar is up nearly ½c from this time on Friday at 73.8 USc. That's a gain of more than 1½c in a week. On the cross rates we are higher too at 93.4 AUc and 59.5 euro cents. That puts the TWI-5 at just up to 74.6 and right at the top of its 2018 range.

Bitcoin is now just on US$10,700, a rise of +US$685 or +6.8% from this time on Friday.

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6 Comments

"We should note that tomorrow is a public holiday in the US, Washington's Birthday. (It is a holiday that came to be known as President's Day, but in the age of Trump, has reverted to its official name.)"

If there was ever a gauge of sentiment in the US re the consensus surrounding their president, this is it.

.. if we line up all the Presidents men , those still alive ... Jimmy Carter , Barack Obama , Big Bush & Baby Bush , and Wild Bill Clinton ...

Donald Trump doesn't look entirely out of the picture , does he ... Obama excepted ... they're a bit of a motley crew ...

While Carter failed to achieve much during his presidency - he has achieved much since. Not bad for a peanut farmer.

Obama excepted?!?!? How many wars started under him? How many whistleblowers prosecuted under him? Looks like your glass of politically correct Kool-aid is empty. Better fill up.

It just shows how infantile the media are.

Once again the ASIC getting on and executing their responsibilities diligently. Such a contrast to our Commerce Commission who at best only pay lip service to keeping our economy honest.