Canada inflation rises, rise of Aussie shadow banking; Singapore & Hong Kong add housing restrictions; UST 10yr at 2.90%; oil and gold up; copper down again; NZ$1 = 68.2 USc; TWI-5 = 71.5

Here's our summary of key events over the weekend that affect New Zealand, with news governments in Hong Kong and Singapore continue to add taxes and restrictions to press back on fast rising house prices.

But in a bit of a first, there is nothing new out of the United States today that might impact the New Zealand economy.

In Canada, inflation is on the rise there. It was up to +2.5% in June, a jump from +2.2% in May and higher than analysts were expecting. The June increase was its highest in six years. The Canadian currency rose on the news because of expectations of interest rate hikes.

In an interesting twist, the regulator-induced push to have Australia's regulated banks reduce their exposure to multi-unit housing projects, the gap has been quickly filled by shadow banks and especially foreign financing. The effect has been to increase foreign debt - and its systemic financial risks. That is because the funding is essentially now from unregulated non-ADIs. This is surely just the start of unintended consequences from aggressive regulator actions reacting to publicity from their Royal Commission and who want to be seen to be "doing something".

In Singapore, they are adding taxes to control runaway house price rises. Locals were slapped with a +5% rise in stamp duty, taking the rates to 12% for a second property and 15% for a third or more. For foreigners those rates are 15% and 20%. In addition, their maximum LVR is now reduced to 75%.

In Hong Kong they are also clamping down, with a new vacancy tax, adding to similar restrictions as in Singapore with a 15% stamp duty on all non-first home purchases.

In China, we should keep an eye on reports out of Beijing that President Xi may be under some internal pressure over how he is handling the US-China trade spat. Nothing there is transparent so the tea leaves need to be read carefully. But that they are surfacing in the first place is interesting.

Speaking of Chinese transparency, a new report out says they are making significant progress with their biggest problem - pollution. But despite the size and speed of the gains, it may still not be enough, the report concludes.

The UST 10yr yield jumped at the New York market close to almost 2.90% and up +5 bps. Markets are expecting inflation to rise faster after US policy missteps. The Chinese 10yr is at 3.51% (up +4 bps from Friday) while the New Zealand equivalent is now at 2.82%, down -1 bp after its chunky rise at the end of last week. And keep an eye out for news on an international bond liquidity slump which is starting to affect the biggest financial market of all.

Gold also jumped, up by +US$7 at the end of trading and is now a just over US$1,232/oz in New York. Although not 'new', we should note that industry observers caution that "we are running out of gold" and major supply additions may not continue. When markets catch up, that may bring a supply price-shock.

Copper has fallen below US$6,000 in another slip.

US oil prices are firmer and now over US$68/bbl. The Brent benchmark is now just over US$73/bbl. The US rig count has fallen by -8 this week although it is up almost +100 in the year.

The Kiwi dollar ended last week sharply higher at 68.2 USc, a gain of more than +¾c after some Trump musings. On the cross rates however we are little changed at 91.8 AUc, and at 58.1 euro cents. That puts the TWI-5 at 71.5.

Bitcoin is now at US$7,525 which is up +2.5% from yesterday, and up more than +20% in a week.

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