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90 seconds at 9 am: US jobs expansion; Chinese PMI marking time, Aussie manufacturing in big contraction; Westpac makes bid for HK bank stake; NZ$1 = US$0.844 TWI - 76.1

Posted in News
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Here's my summary of the key news overnight in 90 seconds at 9 am, including news that tomorrow's Australian rate review is expected to be a tame affair. Markets are not anticipating any change in their 3.0% rate which represents a breather from the steady reductions since October 2011.

In the US, companies kept expanding headcounts in January and revisions to previous months’ showed even bigger gains as their job market grew. American stocks rallied for a fifth week on this news and better-than-estimated earnings sent the main indexes toward record highs. Service industries grew in January too, and at about the same pace as in the prior month, showing the biggest part of their economy is weathering Washington's budget battles.

And a brief update on Jon Corzine's collapsed MF Global. You may recall Corzine as a former New Jersey governor and later Goldman Sachs supremo, and the collapse of MF Global was reported as "another Madoff". Well, it seems it was not insolvent after all. After the stress of bankruptcy and liquidation, even unsecured creditors might get back 100% of their money - quite different to how it was originally presented.

Official Chinese PMI came in at 50.4 in January, slightly lower than expected. That weighed on the Aussie currency.

Australian PMI however came in at 40.2, described locally as 'sluggish' but actually is a disasterous contraction. New Zealand's PMI January won't be released until later next week, but was 50.1 in December. This may go some way to explaining why markets presently prefer the Kiwi to the Aussie.

Over the weekend it emerged that Westpac made a surprise bid in December for a NZ$500 million stake in Hong Kong’s Bank of East Asia. The bid failed it seems, but it is a clear sign Australia’s second-largest bank is becoming more serious about growing in Asia.

Westpac derived most of its NZ$8.1 billion cash profit last year from Australia and New Zealand and has operations in five Asian countries, compared to 14 for ANZ, Commonwealth’s seven and National Australia Bank’s six.

The New Zealand dollar starts today quite a bit higher at 84.4 USc, and especially against the Aussie at 81.2 AUc, and the TWI starts the week at 76.1. (The all-time high is 76.9.)

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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2 Comments

Re: MF Global: It is pleasing

Re: MF Global: It is pleasing to see a company depicted as, "[This was] an example of a financial institution having the freedom to fail,”.. , has picked it self up to pay pennies in the dollar to unsecured lenders. I have the impression our own RBNZ believes local NZ banks have similar feedoms when they proposed OBR

Don Elder gone from Solid

Don Elder gone from Solid Energy.

Dr Don Elder resigns as Solid Energy CEO

11:23am, 4 Feb 2013 | OFFICE

Solid Energy's Chief Executive Officer (CEO), Don Elder, has announced his resignation from the company today, after discussions that have been underway for some time. He has decided to step down immediately as CEO but to remain available to work for the company for a period to assist with a transition.
Dr Elder said that as the company worked its way out of the major global market downturn in 2012, including significant restructuring, the Board would be considering many future changes. He believed it was appropriate, and the right time, for the future direction of the company to be led by a new Chief Executive, and he would support this fully in any way sought by the company.
Chairman Mark Ford said that under Dr Elder's leadership since May 2000 Solid Energy had grown and developed substantially and achieved many successes. The Chairman would like to thank Dr Elder for his 12 years of loyal service to the company.
Dr Elder said his decision was consistent with his belief that the company had a strong future once it worked its way out of the impacts of the market downturn. He wanted to thank the many people in the company who had contributed to its past success and he wished the company every success in the future.
The Board will recruit a new Chief Executive in due course. Garry Diack, previously the company’s Group Manager Organisational Development and Performance, will be the interim CEO until such time as an appointment is made.