Here’s my summary of the key events overnight that affect New Zealand, with news the Brexit fallout is getting real.
Three more fund managers have stopped investors from leaving their UK property funds, bringing the number of funds unable to meet withdrawal requests up to six. More than half of the £25bn of funds committed to commercial property by retail investors have now been frozen by their asset managers, which are coming under pressure to sell buildings to raise cash.
Italy’s banking crisis is far from subsiding. Shares in Italy’s Banca Monte Dei Paschi Di Siena have crashed 45% in 10 days, forcing regulators to temporarily ban short-selling in the stock. The bank has been given until Friday to come up with a plan to reduce its bad loans by 40% in the next two year. Other Italian bank stocks have fallen by about 30% since the Brexit.
The French government has pledged to make its tax regime for expats the most favourable in Europe, in a land grab for London banking business.
In other news, an independent inquiry has slammed the Blair Government for not knowing what it was doing going to war in Iraq with the US in 2003. The ‘Chilcot Report’ reveals it made its call based on flawed intelligence and ill preparation. It says Blair underestimated the difficulties and consequences of the war and overestimated the influence he would have over George Bush.
And finally, we have a bit more clarity about why the Federal Reserve has been sending conflicting signals about when it plans to hike rates. The minutes from its pre-Brexit June meeting show officials voted unanimously to sit tight. Yet it was the result of confusion rather than consensus, as officials couldn’t see eye-to-eye on the strength of the US’s labour market.
UST 10yr yield has inched up overnight to 1.39%, but is still well below its previous 2012 low of 1.43%.
The US benchmark oil price remains low at US$47/barrel, while the Brent benchmark is at US$49/barrel.
The gold price has risen to US$1,364/oz.
The NZ dollar is fairly unchanged from 24 hours ago against the US, at 71.3 US¢. It’s weaken slightly against the Aussie but remains very strong at 94.9 AU¢. The dollar’s down a little to 64.2 euro cents. The TWI-5 index is at 74.9.
If you want to catch up with all the local changes from yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».