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- 90 seconds at 9 am: Dairy prices up 30
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90 seconds at 9 am: Berlusconi to attempt comeback, Monti resigns; China rebounding; Fed poised to expand QE; NZ$1 = US$83.3, TWI at 74.5
Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the Italian prime minister, technocrat Mario Monti has quit just hours after the man he replaced, Silvio Berlusconi, announced plans for a return to power.
Given where his party stands in the polls, Berlusconi has a big challenge ahead, but few people would bet against him. And there is a counter movement underway to keep Monti. All this is important for the euro-zone as a Berlusconi return is likely to be seen as very destabilising. The EU has called for the reform process to be extended; they will be looking on from Brussells with concern.
China’s factory output and retail sales topped forecasts last month in signs that an economic recovery is accelerating.
This rebound will be welcome news for the new Chinese leadership as the real unemployment rate in the country is now estimated to be 8.1%, almost double the official figure.
In the US, the Fed is expected to announce an expansion of its QE3 bond buying program to boost their sluggish growth rate as it continues to focus on ways to invigorate the job market. The markets will hear of their actual decisions early Thursday morning.
Before then, and possibly today, we will get the REINZ housing sales data for November.
The New Zealand dollar starts the week at 83.3 USc the highest it has been since late February this year when it spiked to 84 USc.
The TWI is at 74.5, its highest level since July 2011. It is the gains against currencies other than the US dollar that are pushing up the TWI, particularly gains against the euro and the British pound.