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90 seconds at 9 am: Aussies cut rates 0.5%, bigger than expected; Dow surges to highest since 2007, Fonterra auction weak again
David Chaston details key news overnight in 90 seconds at 9 am including news that Australia's central bank cut interest rates by a hefty half-percentage point late yesterday, signaling a shift in its focus away from fighting inflation and toward safeguarding growth. Disappointing housing trends probably tipped the decision to go for a big cut.
The Australian Treasury department remains bullish on the future of Chinese demand for Australian resources and agricultural products, saying China's appetite for commodities will keep rising until the early 2020s. Some have worried about the China boom running out of steam, but that is not the way the Australian government sees it.
Oil prices jumped more than $2 per barrel. Gold was unchanged.
An official gauge of manufacturing activity in China showed improvement in April, but economists cautioned the overall economic outlook remains unclear.
Closer to home, today's Fonterra auction saw prices fall another 2.4% and dairy prices are now at their lowest level since August 2009. They have fallen one third since the last peak in 2011.