Here's my summary of the key news overnight in 90 seconds at 9 am, including news that Spain has released its 2013 budget details and that shows it is planning to seek more than a quarter of a trillion dollars worth of rescue funds (€207 billion).
This comes after it announced that its banks will require almost €60 billion in new capital to survive the new reality of austerity in Europe. Let's not forget that the problems in Greece, Portugal, Ireland and Italy have not gone away.
But the focus is all on Spain - and Germany, who essentially will need to guarantee the funds. Spain could borrow the needed money from the markets, but at that level it seems unlikely enough lenders will be there.
In China, the latest look at their manufacturing sector is not positive, with it now showing eleven months of consecutive decline. China's yuan briefly hits its highest level against the US dollar since 1994, likely forcing the government to act to protect the country's exports.
The NZ dollar starts the week at 73.9 on the TWI, mainly because the kiwi jumped to almost 80c against the Aussie dollar.
Tomorrow's cash rate review by the RBA is expected to result in another rate cut there as the wind goes out of Australia's sails.
Back here, New Zealanders are very focussed on the spring housing market, and this morning ASB dropped some key mortgage rates.
We have a full review of who has the best rates. Home loan rates are currently art their lowest level in a generation, and that is firing up the housing market at a time the regular spring activity starts.
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4 Comments
the questions that arise if the RBA cuts its rates are the effects on the NZ$ on both the cross rates and the US.
The disastrous effects on NZ manufacturing exports to AUS if they lose the currency advantage.
if as a number of commentators suggest that the overdue correction to the A$ occur?
Not much predictive analysis here from the various commentators.
Did anyone notice the NZ$ vz AUS$ this morning? None of our economic fundamentals have changed in the past few months , so its other countries (US, UK Japan & ECB) intervention in their currencies thats causing this.
Unless we have a co-ordinated intervention in this by the NZ monetary authorities , we are all stuffed.
Our competitive edge is being eroded by the rampant NZ$ , and I am left wondering when the beehive is going to wake up .
Maybe when a powerful grouping like Fonterra starts to feel the effects of the high NZ$ , then we will see sparks fly.
So if Europe is still in dire straits big time, will China’s manufacturing (already declining) going to decline further still?? And will this mean the demand for Australian minerals will also decline even further??? And will this mean there won’t be lots of jobs in the mines (or other sectors as the Australia’s slowing economy), and so for the 50,000 Kiwis who went there last year - and don’t qualify for the Australian dole - be returning to NZ??? And will this add further fuel to the “spring housing market”??? And, as noted, the RBA is expected to cut their official cash rate tomorrow due to their economy’s dire straits. So what is the likelihood of the NZRB having to then follow suit in cutting the OCR to avoid an increasing $NZ, and again add further fuel to NZ house market???
Can we all get rich owning houses????
Cheers!
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