US growth rises, jobless claims low; IMF wants haircut; TPP talks get hard; Aussie banking regulators warn; UST 10yr yield 2.27%; gold lower; NZ$1 = 65.9 US¢, TWI-5 = 71

Here’s my summary of the key events overnight that affect New Zealand, with news the TPP negotiations are at the really difficult stage.

But first, in the US, economic growth accelerated in the second quarter to +2.3% as strong consumer spending offset the drag from weak business spending on equipment. Although the result was below analyst expectations, the American economy has some clear and steady momentum that will bolster the Federal Reserve’s goal of hiking their policy interest rates soon.

The latest American unemployment benefit claims data for last week has showed a small rise, but this data is still near its cycle lows and won’t worry the Fed.

In Europe, an IMF official said the IMF wouldn’t fund Greece without debt-relief pledge from other creditors. First is was Athens vs Germany, now it looks like it will be the IMF vs Germany.

In Hawaii negotiators are becoming less confident that they can get a final deal by Friday’s deadline because of differences over market access for agriculture. In almost every trade deal ever negotiated, freer access for farm products is almost always the final sticking point.

In Europe, they can’t wean themselves off parochial support measures either. They have just confirmed they will continue subsidies for exporters of dairy produce, fruit and vegetables into next year to ease the impact of a Russian ban on those goods.

In Sydney, the chairman of Aussie banking regulator APRA has made an insightful observation: the real disruption in the banking sector doesn’t come from technology per se but from lower brand loyalty. Younger customers are increasingly willing to put their trust in the latest digital offerings, and when all institutions offer good service, brand doesn’t matter. Convenience does.

And another Aussie regulator signaled it would be issuing a critical review of bank lending practices into the ‘investor’ sector.

And staying in Australia, building consent levels have suffered their largest fall in nearly a year as the huge surge in high density apartment building eased in June.

In New York, the UST 10yr yield benchmark is basically unchanged at 2.27%.

The US oil price is just below US$49/barrel, and Brent crude is at US$53/barrel, basically unchanged over the past couple of days. The sustained low price is fueling a construction boom in the US.

The gold price is a bit weaker today at only US$1,088/oz.

The New Zealand dollar is lower today as the greenback gets a boost from their GDP data. The Kiwi dollar is back at 65.9 US¢, at 90.5 AU¢, and at 60.4 euro cents. The TWI-5 is at 71.

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 »

Daily exchange rates

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