Big Aussie trade deficit; record EU jobless; markets nervous ahead of US earnings season; NZ data positive; NZ$1 = US$0.83.6, TWI = 75.2

Here's my quick summary of the key overnight news you need to start your day.

Australia has posted its biggest trade deficit since before the global financial crisis, as households and businesses continue to exploit the high dollar by spending up on imported goods and services.

Despite a rebound in iron ore exports in November, Australia's trade balance sank to a AU$2.6 billion deficit during the month, the widest gap since early 2008.

Unfortunately for New Zealand, imports from us have been falling, down 6.8% in November from the same month a year ago, and the annual trend to November is also a decline, of -2.8%.

Worth watching out for are upcoming announcements from Japan on its new stimulus program, which is widely anticipated to be huge - they are about to gamble on a very risky strategy it seems, and because of its size it could well have global implications.

In Europe, economic confidence increased more than economists expected in December even as the 17-nation bloc remained mired in its second recession in four years and EU jobless reached a fresh recorh high. German exports fell.

There was a surprising report out in the US - state and local governments are in their best financial shape since the recession, giving them leeway to cushion the American economy from federal budget cuts with spending and hiring of their own.

However, market eyes are all on the earnings season which is about to start with Alcoa releasing its results when the market closes today at about 11:30am our time. Stocks fell and gold was up in mid-day trade on Wall Street.

In New Zealand, we got three indicators that things are starting out strongly in 2013. Firstly Paymark reported that end of year retail sales ended on a positive note.

Secondly, the Barfoot Auckland retail data was exuberant - some suburbs showed price rises of 25% year on year, while overall, average prices were more than $50,000 ahead of the same month a year ago.

And thirdly, Westpac reported that household confidence was rising in 7 of the eleven regions of the country, with Canterbury and Auckland leading the way.

Later this morning we get data on the November building consent levels.

The NZ$ opens at 83.4 USc, 79.6 AUc and the TWI is at 75.0. The direction over the next couple of days will depend very much on US corporate earnings trends.