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- 90 seconds at 9 am: Sharp falls everywhere 28
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90 seconds at 9 am: NZ$ over 81 USc as US stocks rise 0.6% after firm building permits data; USDA reports dairy prices rise; Greek fears returning
Here's my summary of the key news overnight in 90 seconds at 9 am, including news the New Zealand dollar is back over 81 USc this morning, rising in tandem with a 0.6% rise in US stocks. It was around 80.8 USc for much of yesterday. (Video due shortly. We are having problems uploading it to Youtube)
Appetites for riskier assets such as the Kiwi dollar burbled higher after US building permits rose in July to a four year high, raising hopes the US economy may not be as weak as some expected. US stocks also rose after Cisco reported better than expected results. See more here at Bloomberg.
However, the celebrations were doused somewhat by nagging fears the recovery may be enough to delay or even cancel expectations the US Federal Reserve will restart money printing in September. Goldman Sachs has forecast this week that the US Federal Reserve will not go ahead with a third round of Quantitative Easing or money printing at its September meeting. See more here at WSJ. Markets are eagerly awaiting guidance from a speech by Federal Reserve Chairman Ben Bernanke at the annual shindig for central bankers at the Jackson Hole resort in Wyoming on August 31.
Elsewhere, German Chancellor Angela Merkel said overnight she was 'in line' with the European Central Bank's plans for bond buying to cool down the Euro-zone crisis, but she reiterated it was all about the 'conditionality precondition', which means the bond buying should only happen after a country has asked for a bailout and is prepared to undergo the austerity measures the Germans demand. See more here at Bloomberg.
Markets are relatively quiet during the middle of the Northern Hemisphere summer, but concerns are growing again about Greece as reports emerge it will ask its donors yet again for another two year delay on its austerity plans. German politicians have repeatedly said they would reject another extension and seem relaxed about Greece leaving the Euro-zone See more here at FT.com
Meanwhile, in China, foreign direct investment fell 8.7% in July from a year earlier to a two year low as reports grow of capital flight from a fast-slowing Chinese economy. See more here at Bloomberg.
The New Zealand dollar was also buoyed as the US Department of Agriculture released data on dairy prices traded on global markets. They rose around 5% and are up in line with the strong results from the Fonterra auction on Wednesday night as the worst US drought in 50 years continues to lift feed costs for American dairy feedlots and reduce production. See those USDA dairy price charts here.