Allies warn US on tax moves; HSBC off the hook; China debt growth surges; Australia shines light on tax dodgers; UST 10yr yield at 2.38%; oil up, gold unchanged; NZ$1 = 69.2 US¢, TWI-5 = 72.3

Here’s my summary of the key events overnight that affect New Zealand with news the New Zealand currency is rising strongly.

But first, the looming new US tax ‘reform’ is about to place more strain on America’s place in the international arena. Germany, France, Italy, Spain and the UK have told the US this planned corporate tax reform will violate the country’s double-taxation treaties and breach world trade rules. They told the Americans to respect the international obligations the country is committed to.

And just how dodgy the current US Administration is can be seen in their ‘analysis’ on the impact of these new ‘reforms’. They declared them self-funding in a one page analysis that is being widely mocked.

And staying in the US, HSBC said it is no longer under threat of prosecution over allegations of money laundering in Mexico. A US Justice Department investigation said the bank had been a conduit for “drug kingpins and rogue nations”.

China’s oft-stated goal of reigning in rampant debt growth has not had any impact yet. Chinese new loan issuance in November came in twice as high as for October and +50% higher than analysts were expecting. Chinese authorities seem to have lost control of their debt markets. M2 money supply was up +9.1% year-on-year.

In Australia, the drive to get foreign companies to pay their fair share of income tax is intensifying. That involves some New Zealand companies, Fonterra and Fletcher Building in particular. Fonterra declared AU$1.8 bln in revenues last year in Australia and paid zero income tax there. Fletcher Building had AU$2.8 bln of revenue and also paid zero. These two are joined by 730 others who also paid zero in the 2015/16 tax year. They are part of a group of 2,043 that had details released by the Australian Tax Office.

In New York, the UST 10yr yield is now at 2.38%.

The price of crude oil is up again today, now just over US$57.50 / barrel, while the Brent benchmark is up over +US$1 to US$64.50.

The price of gold is unchanged at its five month low of US$1,245 oz.

The Kiwi dollar however is higher, noticeably so and now at 69.2 US¢ a rise of more than ¾¢. And on the cross rates we are up too at 91.8 AU¢, and against the euro at 58.6 euro cents. That puts the TWI-5 just up strongly at 72.3 and its highest in over a month. This is what a respected and business-friendly pick for the Governor of the RBNZ can do to our currency.

Bitcoin is now at US$16,387 after having ended yesterday in New York at US$15,037. (Bitcoin actually never ‘closes’ – it trades continuously.)

If you want to catch up with all the changes on Friday, 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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Source: CoinDesk