Fed hike awaited; US confidence, house prices up; Argentine central bank boss quits, Philippines ready to raise rates; NZ braces for new tax; UST 10yr at 3.10%; oil holds, gold up; NZ$1 = 66.5 USc; TWI-5 = 70.1

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Here’s our summary of key events overnight that affect New Zealand, with news pump prices are getting a one-two punch, boosting inflation and restraining discretionary incomes.

But first, international markets are in hold mode awaiting the outcome of today’s US Fed meeting which will be announced tomorrow. A +25 bps rate hike is expected. And data out today indicates rising consumer confidence in the US, as one measure hit its highest level since 2000.

Meanwhile, US house prices are up +6.4% in the year to July, a slightly lower annual increase than recorded in June.

Progress on the Canada portion of the NAFTA renegotiation has slowed to a crawl and seems unlikely to be completed by the US-imposed deadline of September 30.

In Argentina, the head of their central bank has resigned. This is the second resignation from that position in four months. Their currency tumbled on the news.

In the Philippines, a senior official there indicated they will be raising their policy rate at their next meeting, taking their benchmark rate up +50 bps to 4.50%. The country is also considering imposing price controls on rice, pork and chicken in response to shortages after some recent weather events.

Locally, we are about to be hit with a new +3c/L national fuel tax, right at the time international crude oil prices are rising and driving pump prices higher. We currently pay more than 40% of the discounted pump price as tax and the new levies will push that up to over 42% nationally, over 45% in Auckland. The Government wins with its GST collections when the crude oil price pushed pump costs up. All this movement puts upward pressure in inflation. Petrol prices are now at record highs. And that will be restraining discretionary spending.

The UST 10yr is up +2 bps and now at 3.10% and approaching the recent peak in May – otherwise you have to go back to May 2011 to match today’s rate – while their 2-10 curve is now just under +26 bps. The Aussie Govt 10yr is at 2.75%, up +4 bps, the China Govt 10yr is at 3.70%, down -1 bp, while the NZ Govt 10 yr is at 2.71% and up +2 bps.

Gold is up +US$2 at US$1,201/oz in New York.

US oil prices are holding at the new higher levels and now just over US$72/bbl with the Brent benchmark at just under US$82/bbl and a four year high.

The Kiwi dollar is unchanged today at 66.5 USc. On the cross rates we are also little changed at 91.7 AUc, and at 56.5 euro cents. That puts the TWI-5 at 70.1.

Bitcoin is now at US$6,377 and -4% lower than this time yesterday. This rate is charted in the exchange rate set below.

This chart is animated here. For previous users, the animation process has been updated and works better now.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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USD 

NZD

End of day UTC
Source: CoinDesk

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