Here's my summary of the key news overnight in 90 seconds at 9 am, including news the Aussie election date has been set.
But first, the big news of course is the international reaction to Fonterra's whey contamination issue. When the news broke on Friday night, the currency had a mild reaction, but markets closed soon after. We are expecting to see further adjustment down to US$0.77 when the markets open locally in a few minutes. We have more on this story elsewhere on the site.
Elsewhere, US non-farm payrolls came in below expectations - jobs growth there is slow going. But the American unemployment rate dipped slightly to 7.4%.
In China, their non-manufacturing PMI came in lower than a month ago, but still significantly expansionary.
In fact, their central bank is still tightening monetary conditions by draining funds from its banking system, and there is no actual sign yet it is easing up in response to a slowing economy.
The Australian election has been called. September 7 is the date, a week earlier than the previous government had chosen. That will make it 4 days after the next RBA rate decision which is widely expected to be for a cut in official interest rates.
A fact I didn't know; Australia has an official debt ceiling law, very much like the US. The latest budget woes show that it will need to legislate before the end of 2013 to raise the official limit, which is currently set at A$300 billion. It is expected to hit $A370 billion by April 2016, and is currently sitting at A$260 billion.
Today is a bank holiday in Australia, so expect delays in deals across the ditch.
The NZ dollar opens the week at 77.0 USc, the Aussie dollar is at 86.4 AUc, and the TWI is at 74.5.
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9 Comments
Rupert Murdoch declares war on the Australian high-speed national broadband project (through declaring war on Kevin Rudd).
http://www.theage.com.au/comment/murdoch-sends-trusted-general-col-pot-…
Their nice monopoly with fat profit margin goes bye bye. Take NZ as an example, Vodaphone (Telstar/clear) charge $200 for 150GB per month. UFB, price indications I have from Orcon indicate $130 for 200~250gb or 1TB for $200.
So basically come fibre day in my street my BB costs halve.
Good by Vodafone.....I cant wait.
regards
Possibly - but I think it a failure to prioritise capital investment ahead of higher payout levels needed to soothe the grasping demands of the bank's interest rate charges on over capitalised and and hence indebted dairy farms. Problems arise if those payments are secured with slugs of compounded unpaid borrowed funding.
Yes, to some extent. Financilisation has been part of the move to centralisation, which means any error is magnified and the effects are more widespread. So infrequent system wide failures rather than more frequent local problems.
The other side to all this is that if any sort of quality control sytem is working it should regularly be throwing up red flags. If it is not then complacency has set in (eg the finance companies).
more the folly of a credit boom.
plus enthusiastic borrowers who coming out of sharemilking that treat interest as an operating cost and debt to be maximised (as they have no/little equity).
We are not convinced re your co-ops or corporate thinking, we see synlait as one of the biggest borrowers running round always being a bit straped...
Plan B...I don't believe that for a minute. Implicit in your statement is that oversight is what keeps food safe at Fonterra. As though their is no organic want within the organization to provide the best product possible.
How has government oversight really worked out for us?
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