Lower US jobless claims; German exports plunge; China smog and new coal tariffs; ASIC damns life insurance industry; NZ$1 = US$0.787, TWI = 76.5

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of big concerns being raised over the structure of the Australian life insurance industry.

But first, the number of Americans filing new claims for unemployment benefits fell in the first week of October to nearly its lowest level since before the 2007-09 recession, a further sign of growing steam in the US labour markets.

However, their wholesale trade unexpectedly fell in August and stocks rose. However, this data significantly pre-dates the good September indicators that have been coming through for the US economy.

Across the Atlantic, German exports plunged in August by their largest amount since the height of the financial crisis and leading analysts slashed their forecasts for growth, fueling further debate on whether Berlin is doing enough to prop up Europe's economy and its own. Today's data comes on top of yesterday's grim industrial activity data. The Ukraine situation and Russian sanctions are the key driver here. Germany is on the front line of that flash point.

In Britain, as analysts had expected, the Bank of England said it would keep its benchmark interest rate at 0.5%, where it has been since March 2009, and continue with its its large asset purchase (QE) program.

Beijing authorities have raised their smog alert to its second highest level yesterday as pollution envelopes North China yet again. That means transportation restrictions and some industrial closures. Whatever China is doing to control pollution is not really working. They need to do more.

In fact, the crucial final stages of free trade talks between Australia and China have been thrown into turmoil by China's "shock decision" to impose harsh new tariffs on imported coal supplies. It is not actually clear this is a pollution-reducing move, but it is clear that Australian coal exports will be badly hurt.

Australia's jobless rate hit 6.1% in September, according to the Australian Bureau of Statistics, which has come under fire this week for the veracity of its seasonally-adjusted data.

We don't usually report company earnings here but Alcoa Inc reported a stronger-than-expected increase in third-quarter profit on yesterday after markets closed in New York. Alcoa is a bellwether stock and one of the first to report quarterly in the US. Higher aluminum prices and lower costs drove a recovery in its business unit that produces aluminum. But that was not enough to stop the bears coming out to 'play'. Equities are down sharply in New York today in mid afternoon trade.

Back in Australia, their regulator has issued a damning report that found one in three advisers focused more on winning commissions than serving their clients. The initial response from Australia's biggest life insurance companies - including Suncorp, AMP and Zurich - was muted and failed to address allegations of flawed commission and product structures. This issue will echo strongly here soon too. Our FMA will be watching closely. The whole commission and 'soft benefits' culture is unlikely to survive any thoughtful investigation, and that is what the ASIC report sets up.

In New York, UST 10 yr yields have fallen yet again, now to 2.32%. In fact, NZ swap rates open today even flatter in the 2-5 differential than yesterday. Bond market prices are rising to head-scratching levels.

And the oil price has also fallen again and is now under US$86/barrel with the Brent price just on US$90/barrel. The surging US dollar has a lot to do with this movement.

Gold was up sharply today to US$1,225/oz.

We start today with our currency level higher against the US dollar than it was at this time yesterday. The NZD is at 78.7 USc, is at 89.6 AUc, and the TWI is at 76.5. 

If you want to catch up with all the changes yesterday we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »