90 seconds at 9am: Dampening expectations; Super-regulator; Wal-Mart deflation
19th Feb 10, 9:15am
Watch on our video home page here. Watch on YouTube here. David Chaston details the key news in 90 seconds at 9am in association with BNZ, including news with news that Bill English has been dampening expectations about the amount of reform there will be in the upcoming budget. He is now strongly hinting that the government is unlikely to align the personal / trust / and corporate tax rates. In fact, finding a revenue-neutral set of reforms without making meaningful reductions in government spending is proving too hard, it seems. There are also reports the Government is intensively polling around these issues, trying to ensure it doesn't get its supporter base too grumpy. And, the Government plans to create a 'Super regulator' for capital markets that combines the Securities Commission, the Companies Office and the disciplinary section of the NZX. All aimed at rebuilding confidence in stock markets and other securities. In the US, there are reports overnight that manufacturers there are starting to hire, with both call-backs of laid-off workers, and new hires on the increase, as prospects improve. However, there was also a report that new jobless claims for unemployment benefits are still rising. And Wal-Mart, the world's largest retailer, reported its 4th quarter earnings, and that showed a 1.6% decline in sales of its US stores. It put the decline down to less store traffic, and interestingly to deflation in the price of groceries and electronics "“ items that make up 40% of its trade. But it is an enterprise that benefits from deflation "“ its profits jumped to record levels. Overnight markets were quiet, with exchange rates pretty much unchanged. However, the Euro continues to take a hammering, and it is now at its lowest level against the NZD in more than a year. The UK Pound is also starting to come under pressure. Finally, out today are the six month Crown accounts, which will give an early indication of the size of Bill English's immediate problems. Bernard Hickey is reporting from Wellington today and will be back on Monday.