NZ cracks down on speculators, tightens rules for foreigners; ASIC worries about low rates; US momentum slows; Greek bank run worsens; UST 10yr yields fall; NZ$1 = 74.7 US¢, TWI-5 = 77.2

Here’s my summary of the key issues from over the weekend that affect New Zealand, with news of a newly hesitant American economy.

But the big news was on the home front. Yesterday the Government moved to crack down on property speculators who sell houses within two years, and announced that foreign buyers in our property markets will have to register with the IRD and have a New Zealand bank account.

These moves compliment other changes by the Reserve Bank earlier last week, when they took other ‘financial stability protection’ measures related to frothy housing markets in Auckland.

Across the ditch, an Australian regulator is also warning of bubble problems in their housing markets. They are concerned the low interest rate environment is driving investors to pursue high risk, complex investments in their chase for higher yields. Low interest rates drive a search for yield, satisfied by bringing to market complex and risky products often targeted at people without the skills to understand properly.

In the US, a respected measure of consumer sentiment slumped in May. Confidence fell as consumers became increasingly convinced that there would be no quick rebound following their dismal 1st quarter. The decline was widespread among all age and income groups as well as across all regions of the country.

And their Federal Reserve reported that industrial production was static in April, and up only +1.9% year-on-year. Momentum is leaking out of the US manufacturing sector.

In Greece, data out over the weekend showed the size of the ‘quiet’ bank runs going on there, something neither side wants to highlight.

In New York, the UST 10yr benchmark yield fell back sharply in Friday’s trading, although in after-hours trading it did gain back a little, but is now at only 2.15%.

The US oil price is little changed, still under US$60/barrel, while Brent crude is back under US$67/barrel. Falls in the US rig count have almost stopped, but there is a noticeable reduction of rigs in operation outside the US.

It is the same story with the gold price, still at US$1,225/oz.

The New Zealand dollar starts today a little lower at 74.7 US¢, at 92.8 AU¢, and at 65.3 euro cents. The TWI-5 is at 77.2.

If you want to catch up with all the local 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 »

Daily exchange rates

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for(i=0;i

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