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90 seconds at 9 am: Risk back in favour; Dow up; NZD up; strong AU jobs growth; Fonterra annouces very big ambitions in China
Here's our summary of the key news overnight in 90 seconds at 9 am, including news that there has been a marked turaround in sentiment overnight with the Dow recovering much of its recent loss and currently sitting just below the 13,000 level. The cost of oil is climbing, and other commodities are rising also. Gold has made a big jump in markets overnight, virtually erasing all the decline since the beginning of the month.
'Risk' is back in favour, and as a consequence the NZ dollar is back in favour. It rose alomost one full cent overnight and is almost back to its highest level since early March. To be fair, it has bounced around within a fairly strict range in that period and todays rise is not yet outside that range, but at this level it will keep a lid on the cost of imports and therefore tradeables inflation.
Across the ditch, yesterday's labour market news was surprisingly positive. Australia added many more jobs in March than was expected. Their unemployment rate was stable at 5.2%. However, most economists - and market pricing - are still picking a rate cut in early May. And there is more concern in Australia about the impact of a Chinese growth slowdown on their economy.
Overnight Moody's issued some analysis on the expected effect on corporate Australia of such a slowdown, and sees "a material adverse impact". We will know how fast the Chinese economy is slowing later today when Chinese GDP data is released for the March quarter.
Overnight, we also got data on market pricing for dairy prices and they showed small falls across almost all products, but especially cheese. This latest data runs counter to the previous Fonterrra auction price signal that recorded a small rise in dairy prices. Still, despite these latest numbers, dairy prices are holding at generally higher levels, although the high Kiwi dollar doesn't help returns.
Yesterday, Fonterra announced big ambitions to be a major player in China's domestic dairy market, a significant event for the company that you can read more about here ».