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90 seconds at 9 am: Markets accept NZ budget; paralysis in the EU; China lending slump; US trudges on; dairy prices fall
Bernard Hickey is in Wellington again today. Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the New Zealand Budget has been positively received by the markets. The exchange rate held the same rate its had for the past week - TWI at 68.5 - and credit rating agencies seem happy enough.
The usual suspects had the usual criticisms, and perhaps I fall into that category - but that is not how the rest of the world sees it, or the rest of New Zealand for that matter.
The EU summit is turning out to be a serious case of 'all talk and no action' - they seem paralysed, unable to take concerted action. But Germany is reportedly threatening to cut aid to Greece. In France, the newly elected President has actually reduced their retirement age from 62 back to 60 in a stunning act of willful blindness.
Meanwhile, their economies are turning down sharply. An early measure of European manufacturing and services dropped in May, German confidence declined, and Britian's first quarter GDP was even weaker than earlier reported, and some see even the current level of economic activity in Britain as unsustainable.
In the US, fewer Americans filed for jobless benefits last week. Their weekly unemployment benefit applications dipped by 2,000 to a seasonally adjusted 370,000, perhaps signaling modest job growth. Their economy is trudging along ok, but will it last, given the European slump and China slowdown? I doubt it.
US banks however reported their highest quarterly profit since mid-2007, even while overall lending activity decreased for the first time in four quarters.
Equity markets held their own overnight, but are wary. There was no recovery for commodities from their recent falls - oil and gold were both essentially unchanged, although dairy prices recorded another fall in the lastest USDA oceania survey.