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Focus on earnings; US wages rise; huge banks settlements; Berlusconi deal; good dairy conditions; NZ$1 = US$0.83.6, TWI = 75.2
Here's my quick summary of the key overnight news you need to start your day.
Firstly, the NZ$ opens at 83.6 USc, 79.7 AUc and the TWI is at 75.2 after a broad-based appreciation against most currencies.
In New York, stocks fell as traders cashed in recent gains that had lifted the S&P 500 to a five-year high. Today marks the start of the fourth-quarter earnings season, and there are some concerns over what those earnings will show. However, there are reports that the slow but steady jobs growth in the US is resulting in wage rises. Not only are hourly rates rising again, but hours worked climbed as well. These are 'new' things for American workers.
Staying in the US, banks there agreed to pay a total of US$18.5 billion (NZ$22.1 billion) in separate deals on Monday involving troubled loans and foreclosure abuses, illustrating the extent of the banks’ role in the excesses of the credit boom.
And separately, Bank of America agreed to an additional US$11.7 billion (NZ$14 billion) settlement package designed to resolve most disputes with US-owned Fannie Mae over bad mortgages after a deal announced two years ago proved inadequate. It was a big day for US banking regulators; that NZ$35 billion in total. That BofA settlement will wipe-out its quarterly earnings.
In Italy, former Prime Minister Silvio Berlusconi renewed his campaign partnership with the Northern League party and reportedly agreed not be be prime minister again if they should win.
It is hot in Australia. But here, we will avoid the soaring temperatures and dry rivers in the first quarter, says NIWA, meaning minimal disruption to milk production, which generates a quarter of the nation’s exports.