Bernard Hickey details the news in 90 seconds at 9 am in association with Bank of New Zealand, including expectations that the Reserve Bank of Australia will hike its cash rate by 25 basis points to 4.75% later today as the central bank grapples with inflation pressures from the biggest Australian mining boom in more than 100 years.
This would be good news for New Zealand exporters to Australia, given our currency is at a 10 year low vs the Australian dollar as expectations for our interest rates and economies diverge.
The Reserve Bank of New Zealand is expected to keep its Official Cash Rate on hold at 3% until well into next year, while Australia is expected to push its rate up to 5% by then.
Meanwhile, Fonterra is in talks to build a 40,000 cow dairy farm in India, Business Day reports. Fonterra would have a 30% stake in the venture.
Nervousness about Europe's financial situation returned overnight.
Swiss regulators are set to force Credit Suisse and UBS to raise more capital so they have 19% of their assets set aside in capital, which is almost double that required under the just-agreed Basel III global capital rules.
There's also a report from the New Economics Foundation that suggests the UK government will have to bail out its banks again next year and that the banks there are borrowing 25 billion pounds a month to survive. Britain's Chancellor of the Exchequer George Osborne has denied any bailout is immiment.
The Dow was down around 1%, but attention in America is focused on key jobs numbers due on Friday night and talk of Quantitative Easing.
No chart with that title exists.
9 Comments
Ozzie housing market leveling out??
"..........the nation's largest mortgage broker warned the traditional spring increase in housing loans has failed to materialise."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10678193
for those of you philistines who don't believe that you can have inflation in a slow or negative economy....ask robert mugabe about the zimbabwean economy!
inflation isn't the word there...off the chart inflation is!!
Inflation there v elsewhere.....totally different.......
regards
The cost of living is going up, but wages are falling in real terms. Thus capital items like houses are less affordable. I think its the classic what we need is going up while asset prices could collapse. Im looking at farms at present and prices are way way back, It could be described as a collapse. Costs need to fall but our Govt is instead increasing costs so the collapse moves ever closer as we lose any competitive advantage. The wine industry is a good example of what happens if your costs are higher than your competitors. 'Wipe out'
The wine industry isn't an example of competitive advantage. It has its own origins in its own strife due to the following:
1, intial purchase price too high.
2, intial LVR was far too high in anticipation of increased future cash flows.
3, the market adjusted towards lower long term sustainable returns per tonne.
4, there was a crash due to over supply and lack of focus on securing new markets when it was obvious years ago that we were in for over supply.
On balance, 1 & 2 is the reason for most of the world's strife right now.
[Quote] This would be good news for New Zealand exporters to Australia, given our currency is at a 10 year low vs the Australian dollar as expectations for our interest rates and economies diverge. [endquote]
And better still for Australian interests to acquire NZ's "means of production" rather than the production itself.
Over at " Interest.co.curry-bag " are our Indian compatriots going bollocking mad at foreigners ( such as Fonterrible ) buying up their farm land ? Is the Indian government enacting laws to allow them to deny foreign investment , based upon the ministers whim ?
Iffco would have a 45 per cent stake, Fonterra would hold 35 per cent and an Indian company, Global Dairy Health, would hold the balance of 20 per cent, the newspaper said.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=106…
A 35% stake is quite different to owning the land GBH. As it is an Indian farmer cooperative it will be interesting to see if it will be one farm or if in fact they will use existing suppliers land.
Mitsui has a 21% interest in Synlait Farms.
ITYS- then why are debt free vineyards unable to make any return?
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