Here's my summary of the key news overnight in 90 seconds at 9 am, including news the American economy grew at a substantially faster pace in the third quarter than first thought. In the second quarter, the US economy grew 1.3%. The US Commerce Department increased its third quarter estimate from a 2% to 2.7% annual rate, but economists do not see that level continuing. Weekly jobless claims fell, but the four-week average remained high.
Also not coming up to expectations were retail sales in November. Major chains including Macy’s, Nordstrom, Kohl’s and Target said their sales declined in November, which included the important Black Friday kickoff of the holiday shopping season.
In the UK, the outgoing Bank of England governor said British banks may be underestimating the risks facing them and should be urged to raise their reserves. Their big four banks could need £35bn of new capital and they could be forced to begin raising new capital soon.
The AFR is reporting the Russian central bank is increasing its $A buying by at least A$20 billion and could want up to 10% its reserves in Australian currency assets, making it harder for the RBA to push down the currency. Like New Zealand, Australia is reviewing its official interest rates next week.
Today is a special day for the NZX and Fonterra as its new 'Farmers market' - the TAF - is launched. Bernard Hickey will be reporting in from Darfield where Fonterra is opening a big new dairy factory, and the senior Fonterra brass have gathered to celebrate the start of their new capital structure. The high level of offshore interest in Fonterra will no doubt keep upward pressure on the NZ dollar.
The NZ dollar end the month at 82.2 USc and 73.5 on the TWI. What is remarkable about these levels is that they are almost the same as at the end of October, and September. In fact they are close also to the levels at the end of March. The rate may be higher than some commodity manufacturers want, but rate volatility has been low for most of this year (apart from a six week period in May/June).