Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the number of Americans filing new claims for unemployment benefits fell sharply last week to the lowest level since February 2008. And there was positive jobs surprise in Australia too - Australian employers hired almost three times the number of workers economists had forecast for September, even as the unemployment rate jumped, as many more people reentered the job market.
There has been a surprise also in the euro debt markets. Italy got away a big new debt auction successfully, with a bid-to-cover ratio of 1.7 and an interest rate at an impressive 2.86%. This is in stark contrast to Spain where their government bonds are facing a selloff by investors concerned that the nation’s credit rating will be cut to non-investment grade after Standard & Poor’s lowered its ranking for the debt.
The German-led drive for austerity is worrying the IMF: Christine Lagarde said overnight that debt-stricken Greece should be given more time to implement its austerity program and European countries should refrain from fresh budget cuts or tax rises if growth weakens.
Also worried are the South Koreans: The Bank of Korea has cut its base interest rate for the second time this year in a move designed to shore up Asia’s fourth-largest economy as it slows on the back of Europe’s protracted debt crisis and the economic slowdown in the US and China.
And Japan has signalled it is going its own way on its currency. It wants to rein in the yen's strength, it says. Apparently it has been negotiating a co-ordinated response with the US but now says differences on foreign exchange couldn't be resolved through negotiations.
Meanwhile, the lower US currency isn't helping its trade deficit which widened in August, as exports of agricultural and industrial goods fell.
The NZ$ was unaffected yesterday by all this and is still holding this morning at 81.8 USc and 72.9 on the TWI, levels it has been broadly at since early August - or, apart from an 8 week period mid-year, broadly at all year.
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