Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that New Zealand's economy managed (just) to avoid a double dip recession in a technical sense in the second half of 2010.
But the economy was as flat as a pancake through the second half of the year and is expected to contract in the first quarter because Christchurch, which generates 15% of NZ GDP, has been shut for the last 5 weeks of the quarter. See Alex Tarrant's article on the GDP result.
However, economists are expecting growth to rebound later this year and in early 2012 as the effects of the Rugby World Cup and more than NZ$15 billion worth of foreign reinsurance money flows into the Christchurch rebuild. Most expect the Reserve Bank to start increasing the Official Cash Rate again from as early as December this year.
Meanwhile, Portugal is now expected to have to ask for a bailout to avoid defaulting on its sovereign debt. This follows the resignation of its Prime Minister Socrates yesterday and the failure of an austerity package to get through parliament. See more here at Bloomberg.
A key meeting of EU leaders will be held this weekend to try to stop the European Sovereign Debt crisis from worsening further. The euro rallied ahead of the meeting. See more here from Bloomberg.
The key points to watch are the Spanish and Italian bond markets, given the big fear is the problems now evident in the PIGs (Portugal, Ireland, and Greece) spreads to the S (Spain) in PIGS.
Overnight Moody's downgraded 30 smaller Spanish banks on fears the Spanish government might not bail them out if they have to book massive losses from their exposure to the collapsed real estate market there. See more here at Bloomberg.
Meanwhile in the United States overnight, figures showed durable goods orders fell surprisingly. See more here at Bloomberg.
But the Dow was up 0.6% and the gold price rose to a record high. See more here at Bloomberg.
The New Zealand dollar rose to 75 USc after the government sold NZ$950 million worth of bonds, forcing foreign investors to buy NZ$950 million of New Zealand currency.
One of the problems with too much foreign borrowing is it pushes up the New Zealand dollar and punishes exporters.
(Updated with links out)
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8 Comments
Forgot to mention Gold hit another record overnight.
http://www.bloomberg.com/news/2011-03-24/gold-surges-to-record-on-haven…
cheers
Bernard
No wonder – more uncertainty in international markets, USA, Europe, China, in Japan, on the political front especially in Libya http://www.bbc.co.uk/news/world-europe-12833196 and the Middle East.
And Standard and Poor's cuts Portugal's sovereign credit rating by two notches...
http://online.wsj.com/article/BT-CO-20110324-714723.html
cheers
Bernard
George Soros is reorganizing the entire global economic system in two weeks time...............apparently.........
http://www.mrc.org/bmi/commentary/2011/Unreported_Soros_Event_Aims_to_R…
Yes it's about the UK..but it mirrors the situation in NZ.omirrors
"Inflation will exceed expected salary increases until the middle of 2013, more than five years after the onset of the recession, figures from the independent Office for Budget Responsibility (OBR) suggest.
The predicted squeeze is far worse than ministers had previously signalled. A typical middle-class family will see their disposable income fall by more than £1,500 this year as a result.
In one possible scenario, the OBR, set up by George Osborne to provide economic forecasts, suggests that high inflation could result in a twelvefold rise in Bank of England interest rates, up to six per cent, plunging many households into difficulty." telegraph.
All we have done, is, escaped it this time. But wait until the next GDP Q.
Radiation contamination at the nuclear site suggests the containment vessel at number 3 has been breached...measurements showing contamination reaching 10ooo normal...with workers receiving radiation burns from standing in water...wind direction back toward Tokyo soon and sign that foreign companies are refusing to ship in stuff..
I suspect the disaster is taking a more serious turn.
So, so tragic. And reactor 3 was the MOX fuel as well, if I recall correctly. Those workers are definitely heroic - sacrificing their own lives for the good of the country/world.
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