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90 seconds at 9 am: G7 leaders call for oil production lift to offset growth-killing spike in oil price; RBNZ seen holding OCR til 2014; Australian house sales slump 5.6%
Here's my summary of the key news overnight in 90 seconds at 9 am, including news that finance ministers from the world's seven largest economies have called for increased oil output to cope with an increase in demand and offset the growth-killing effects of the recent oil price spike.
The said they 'stand ready to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied'. See more here at Bloomberg.
The increased concern about peak oil and an 11% surge in the oil price in July and August has combined with a spike in food prices because of the worst US drought in 50 years to worry policy makers that these twin price shocks could derail any gathering economic recovery.
The NZIER said overnight the Reserve Bank of New Zealand was likely to 'look through' these two price shocks and keep the Official Cash Rate on hold until 2014. See more here in Alex Tarrant's article.
Meanwhile, the oil price rose overnight on talk of falling US inventories and a fire at a Venezuelan refinery. There is also concern Tropical Storm Isaac may shut Gulf Coast refineries. See more here at Bloomberg.
US President Barack Obama is also thought to be considering releasing oil from America's strategic oil reserves to try to contain oil prices that have driven 'gas' prices to the politically painful level of almost US$4/gallon. See more here at Bloomberg.
Petrol rose near NZ$2.24/ltr at some Auckland petrol stations overnight.
Elsewhere, US consumer confidence fell in August by the most in 10 months, driven in part by those rises in 'gas' prices. See more here at Bloomberg.
In Australia, new home sales fell 5.6% in July from June to their second lowest on record as consumers worried about the slowing Australian economy, the impending end of the mining boom and very high debt levels. See more here at Bloomberg.
Also in Australia, Labor Prime Minister Julia Gillard has announced the scrapping of Australia's A$15/tonne floor price and the adoption of the European market price for carbon. This also brings the Australian system more into line with New Zealand's carbon emissions trading system. See more here at SMH.com.au.
The New Zealand dollar was solid overnight around 80.5 USc, having dipped yesterday after Fonterra reduced its milk payout forecast. Stock markets were flat and quiet ahead of key central bank speeches and announcements over the next two weeks.