Here’s my summary of the key events overnight that affect New Zealand, with news of international tax feuds continuing.
The US has launched a stinging attack on the European Commission in an attempt to stop Brussels from hitting Apple with a demand for billions of euros in underpaid taxes. The US Treasury has issued a rare warning that Brussels is becoming a “supranational tax authority” that threatens international agreements on tax reform.
Meanwhile UK authorities are proposing new legislation requiring taxpayers with outstanding offshore tax liabilities to come forward before being subject to a new set of sanctions for “failing to correct”.
New housing data out of the US suggests rising prices and limited supply are cooling sales. A Federal Housing Finance Agency report shows house prices rose 1.2% in the second quarter – a 5.6% increase from last year. Meanwhile, a National Association of Realtors report shows existing home sales fell 3.2% in July – a 1.6% drop from a year ago.
Rising prices aren’t deterring first home buyers from entering the market, with the share of first-time buyers rising to 32% from 28% a year ago.
Yet the Agency’s chief economist says the rate of price growth is slowing. Data out yesterday, showing a surge in new home sales, also indicates there’s a rebound in residential construction investment.
The pace of Germany’s economic growth has slowed in the second quarter, yet remains steady. Its gross domestic product (GDP) rose in line with expectations at a quarterly rate of 0.4%, or annualised rate of 1.7%.
The growth in Europe’s largest economy was spurred by strong exports, high state spending and private consumption, which made up for weaker investment. In light of the Brexit, it’s worth noting a large portion of Germany’s exports were to the UK.
In New York, the UST 10yr yield has remained at 1.55% overnight.
The US benchmark oil price has fallen on an EIA inventory rise. It’s down around US$1 to US$47 a barrel, while the Brent benchmark has slipped to US$49 a barrel.
The gold price is also down to US$1,325/oz.
The New Zealand dollar starts the day strong, as investors anxiously await the Federal Reserve’s annual meeting on Saturday (NZ time). It’s at 73.1 UC¢, 96.0 AU¢ and 64.9 euro cents. The TWI-5 index has risen to 76.0.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».