Australia to up the ante on money laundering regulation; ECB worried about a euro 'overshoot'; US unemployment benefit applications at a low; UST 10yr yield at 2.21%; oil and gold up; NZ$1 = 72.9 US¢, TWI-5 = 75.6

Here’s my summary of the key events overnight that affect New Zealand, with breaking news 13 people have been killed as a van has ploughed through a crowd in Barcelona. The Islamic State has reportedly claimed responsibility for the attack.  

Australia will start regulating digital currencies like bitcoin for the first time. Its Justice Minister has announced plans to reform the country’s anti-money laundering laws to bring digital currency providers under the remit of the Australian Transactions and Reporting Analysis Centre (AUSTRAC). It also plans to strengthen AUSTRAC’s money laundering investigation and enforcement powers, increase border control and deregulate low-risk industry sectors. The announcement has been made just days after a fresh money laundering scandal has been uncovered at the Commonwealth Bank of Australia.

The euro has sunk, following minutes from the European Central Bank’s (ECB) latest meeting showing policymakers are concerned about an overshoot in the currency. A strong euro, making European exports less competitive, could threaten policymakers’ efforts to boost inflation. The ECB says favourable financing conditions shouldn’t be taken for granted.

The number of Americans who requested unemployment benefits fell to near a six-month low last week. The data points to a further tightening in the labour market that could encourage the Federal Reserve to start unwinding its massive bond portfolio.

Retail sales growth in Britain slowed as expected in July, after a strong second quarter. This points to a continuing trend of subdued growth, as consumers feel the sting of higher inflation.

In New York, the UST 10yr yield has slumped to 2.21%. Commenting on this low yield, the Dallas Fed President Robert Kaplan says the central bank should be “patient and judicious” as it considers interest rate hikes. He says there’s “no doubt that as the [yield] curve gets flatter and inverted, that is a sign of economic trouble”.

The US benchmark oil price is up a notch to US$47 a barrel, while the Brent benchmark is at US$51. The move comes as a new report highlights declining stockpiles in a part of the US.

The gold price is a few dollars higher at US$1,287/oz.

Turning to the dollar, the Donald Trump effect appears to be keeping the US dollar lower than you might otherwise expect. The New Zealand dollar is at 72.9 USc, 92.4 AU¢, and 62.1 euro cents. The TWI-5 index is down a little to 75.6.

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 ».

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