Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the New Zealand dollar fell to a fresh 10 year low against the Australian dollar of 74.23 Aussie cents overnight.
This is ahead of New Zealand GDP figures due at 10.45 am expected to show little or no growth in the September quarter.
This contrasts with still firm growth in employment and wages in Australia, which is experiencing its biggest mining boom in more than a century, thanks to China's construction surge. See our interactive chart of currencies below. The Australian dollar briefly hit parity with the US dollar this morning.
This weakness in the New Zealand dollar vs the Australian dollar is great for manufacturing exporters to Australia and tourism operators who rely on Australian tourists.
Meanwhile, more detail has emerged from the receivers report into Southbury Group, the holding company owned by Allan Hubbard that owned South Canterbury Finance.
The report (available in full here) showed Southbury owed South Canterbury NZ$85 million. It also found the accounts provided by Hubbard to be "incomplete and unreliable".
Receivers McGrath Nicol said they had referred their concerns about various transactions to the authorities, including the Serious Fraud Office, which is investigating Hubbard's "complex intermingling of affairs".
Meanwhile, US GDP growth for the third quarter was revised up to 2.6% from 2.5%, but this was less than economists' forecasts for a 2.8% growth figure from a year ago. UK economic growth was also slower than expected.
US inflation was also lower than expected and existing home sales for November grew slower than economists had forecast. This reinforces the tepidity of the US economic recovery as the US Federal Reserve prints money to try to fire up US economic growth.
Meanwhile, the US Treasury is expected to sell US$99 billion of new Treasury bonds between Christmas and New Year to fund a US government deficit that threatens to hit US1.3 trillion for the year, which equals around 9% of GDP.
This is the third year running where the US government has run a deficit approaching 10% of GDP. US Treasury bond yields rose again overnight.
As if to reinforce concerns about the US dollar, the oil price rose to over US$90 a barrel for the first time in 2 years. China also raised its gasoline and diesel prices by 4% overnight as oil prices rise.
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6 Comments
Petrol prices in Iran went up overnight by 400%
http://peakoil.com/consumption/gas-prices-in-iran-went-up-overnight-by-…
To clarify, it would seem you can (or rather could) buy petrol in Iran for the equivalent of about 10 US Cents per Litre, up to a limit.
Ouchh!! ..
Looks like we are on our way to $100/bbl .. my guess is that here in NZ $2.00/lt for 91 will be in the rear view mirror very early next year.
Of course the increased transport costs will flow on through to the rest of the economy in quick time, and households will be having to tighten the belts even more.
The only thing that will counter rising oil prices is a strong kiwi dollar, and that too looks like its headed lower.
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