Latvian scandal widens; Indian fraud clearer, Japan exports jump, Singapore raises taxes; China stirs concerns; NAB sharpens axe; UST 10yr at 2.87%; oil up and gold down; NZ$1 = 73.7 USc; TWI-5 = 74.5

Here's our summary of key events over night that affect New Zealand, with news of tax increases in Singapore.

With both Chinese and US markets closed for holidays, the focus has turned elsewhere.

Firstly, the ECB has frozen all payments by a Latvian bank, following accusations by the Americans that ABLV laundered billions in illicit funds, including for companies connected to North Korea’s banned ballistic-missile program. As we reported yesterday, the ECB's Latvian member has been detained in the widening investigation. He is just the latest in a growing list of ECB bosses accused of malfeasance.

Also widening are the problems at the Mumbai branch of the state-owned Punjab National Bank where a fraud of over US$1.5 bln appears to have occurred. Two of India's wealthiest people, including a celebrity jeweler, are said to be behind the massive fraud. Both have left India and disappeared.

In Japan, they have started the year with a trade deficit as imports of crude oil overwhelmed the revenue from export shipments. The negative figure came after a long period of surpluses. But those oil imports overshadowed a very strong rise in exports, up +12% year-on-year and indicating an expansion of their economic recovery.

Singapore has announced that it will raise its GST rate from 7% to 9%, but it put off the change until after their next election. This tax increase comes despite strong national account surpluses and is being done to deal with an ageing population. They have also raised their stamp duty on S$1 mln housing transfers.

Australia, the United States, India and Japan have been discussing a joint regional infrastructure scheme designed to be a rival to China's multibillion-dollar "Belt and Road" initiative, the AFR is reporting. It is an initiative that is likely to put New Zealand in a delicate position with China, Australia and the US.

And more specifically in Australia, major bank NAB is preparing to eliminate the first 1,000 jobs under a AU$1 bln cost-cutting drive announced last year to make it a "simpler, faster bank" as it prepares for tougher competition. Chief executive Andrew Thorburn in November announced up to 6,000 existing jobs would be lost over the next three years out of its current 35,000, as part of a plan to slash people expenses while investing in new technology.

In New York, the UST market hasn't traded and the 10 yr yield remains at 2.87%.

The gold price is lower by -US$1 this morning at US$1,346.

Oil prices are a noticeably firmer today, up more than +US$1, with the US benchmark now just under US$62.50/bbl and the Brent benchmark over US$65.50/bbl.

The Kiwi dollar is little changed this morning at 73.7 USc. On the cross rates we are stable too at 93.2 AUc and 59.4 euro cents. That leaves the TWI-5 marginally lower at 74.5.

Bitcoin is now just on US$10,980, after having powered on up over US$11,000 about 4 hours ago.

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people being replaced by tech and AI , this is going to be an ongoing theme which i dont think governments have got there heads around yet, least of all ours that still wants to import a low wage economy

That's the rhetoric we've been hearing for a while, but so far unemployment rates seem to be going down....

Don't go with what numbers the government feeds you on unemployment. The statistic was designed back when things were simpler.
The unemployment figure successfully masks the fact that well-paying white collar jobs are quickly disappearing, all thanks to technology and business process offshoring, while new jobs are sprouting up in low-paying sectors like hospitality, tourism and retail. This trend is also evident in the wage growth numbers.

Low unemployment rates can be a positive statistic that's able to mask other, less desirable trends. Long-term unemployment rates were at their lowest in 2008, and have since been tracking upwards as of 2012. 46,000 were long-term unemployed as of 2015. 12% of the part-time NZ workforce (122,000 people) is now underemployed. Job creation is good, but if those jobs are part-time and low wage, then that's a problem.

im sick of listening to a recording when i ring a company, sorry bit old fashioned like to talk to humans.
one company i worked for has even replaced the recptionist with a touch screen contact TV

then there were 5 all wanting to be boss.
this will be a train wreck for years to come with factions and whispers behind closed doors as the polls fall.
they will let this government off the hook and not be strong enough to keep them to account

It will be a war of attrition, and none of them are going to come out looking good.

" I am a passionate believer in how successful New Zealand can be if we choose positive forward looking policies"
We can't afford to sort out the environment, mental health, general health. housing or Auckland public transport, but here have a small tax cut that will cost billions per year. Very forward thinking...

Having listened to Mark Mitchell I'm not confident National will be turning it around any time soon with him at the wheel, ditto with Stephen Joyce and Judith Collins. Establishment conservatives and economic growth dinosaurs. All irrelevant and retarded in today's geopolitical environment.
Amy Adams (and Nikki Kaye) are their only hope(s) although I prick Bridges to get the nod for all the wrong reasons. view -

'a radical right wing mercenary with deep links to Judith Collin’s favourite attack dogs Slater & Lusk (who helped him win the Rodney candidacy) and who have a long term plan to use him to implement a radical right wing agenda has thrown his hat in the ring..'


the two f's have really f up. Thank god our economy is based on housing...that'll see us through.

And to think NZ was kicked off the EU's so-called White List a few years ago after Latvia complained about us -


Re the Australia, Japan and US infrastructure initiative (as you say, 'likely to put New Zealand in a delicate position with China, Australia and the US'), this 'delicate position' represents a fundamental decision for New Zealand. Do we put a relationship with a totalitarian state above support for such human privileges as rule of law, freedom of expression, religion and and assembly? No state is perfect; every state can readily be criticised; but few others are as determined on repression of intellectual, social and personal freedom as China. Sooner or later we'll need to show what we actually stand for.

While our past political leaders leap vaingloriously onto the boards of Chinese banks, and Chinese investment is welcomed as a godsend for our economy, we are heading fast towards a T-junction. National autonomy is a relatively perilous thing. It will be far weaker if we choose the wrong direction. Do we risk our 'human capital' for the sake of foreign capital?

Interesting link, Andrewj. We are fortunate in our society to have the opportunity to work, as each of us wishes, to change, adapt or renounce the model. This is the free investment of human capital.

The right to full self-determination is always takes rights from another because those rights have value to them......politicians, bureaucrats, public servants etc all have a self-interest in this bogus system!

The current system requires:
Rule 1. Find an emotional issue that can prompt outrage......
Rule 2. Inform how you intend to solve this issue.....
Rule 3. Use regulation and compliance.....
Rule 4. Increase the size of the issue so it gets plenty of public awareness and people on board to the point
of mass outrage.....manipulation, mass lies, censorship etc. Use Fear!
Rule 5. More regulation, more compliance, larger numbers of people to administer, more costs etc.
Rule 6. Never solve the problem. Keep it bouncing around for years.

Rule 7. Look for another issue rinse and repeat.

Sadly all too true.

Anti Money Laundering & Countering the Financing of Terrorism, is a good example.

Notaneconomist - USA v China. I vote for the USA especially in light of the fact Trump is now in charge and the Clintons are being exposed.....

Perhaps Putin will sort out Latvia as a gift for Trump. Baltic States apparently are in his sights & Any excuse would surely do, after all both play the same game of brinkmanship, but then Putin is really not accountable to anyone back at home, whereas Trump only thinks he (Trump that is) is not.