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90 seconds at 9 am: Obama rejects Republican plan to fix fiscal cliff, saying it must include higher taxes for the top 2%; NZ$ solid ahead of RBNZ decision; Milk powder price drops
Here's my summary of the key news overnight in 90 seconds at 9 am, including news US President Barack Obama has rejected a Republican proposal to carve US$2.2 trillion off the US fiscal deficit that doesn't include higher taxes for the top 2%.
Obama told Bloomberg the Democrats would not accept a deal that didn't include a higher marginal tax rate on household incomes over US$250,000.
The Fiscal Cliff remains a serious risk for the global economy as the countdown to January 1 gets nearer, although US stocks were relatively flat overnight. Meanwhile, Reuters reports Republicans have started turning on each other as the talks intensify and the pressure goes on many Republicans who pledged never, ever to raise taxes.
Meanwhile, closer to home, the Reserve Bank of Australia cut its official rate by 25 basis points to a record equalling 30 year low of 3% and kept an easing bias.
It is struggling to cushion the economy over the Tasman as it cools under the weight of a slower Chinese economy and the pressures on the domestic sector from a high Australian dollar, which actually firmed last night to over US$1.04 because some traders had expected a bigger cut. See more here at Sydney Morning Herald.
Economists expect Australia to cut its official rate to 2.5% over the year ahead.
None of the big Australian banks have yet to pass on the 25 basis point cut. The Bank of Queensland, however, last night cut its standard variable mortgage rate by 20 basis points to 6.51%.
The Australian government has argued the banks should pass on all of the Reserve Bank's cut. ANZ is not due to decide on its mortgage rates in Australia until December 14.
Back in New Zealand, the Reserve Bank is expected to leave its Official Cash Rate on hold at 2.5% tomorrow morning. The focus will be on any bias upwards or downwards in the Monetary Policy Statement, any talk on New Zealand's high dollar and more debate around bank profitability.
Elsewhere, milk powder prices fell 2% in the fortnightly auction overnight on Fonterra's GlobalDairyTrade platform. See the full results here.