Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the TWI hit record territory last night. At about 10pm it reached 77.23, but has fallen back to 76.94 this morning, which is still above the previous record of 76.88 set way back in July 2007.
At that time, the RBNZ intervened to push the level down. back in 2007, it was our strength against the Japanese yen and the Australian dollar that caused concern. Today it is strength against the US dollar and euro that is causing the spike. Yesterday's stronger than expected data in the monthly PMI manufacturing index probably helped bouy sentiment. You can read more about the TWI here.
The IMF said the talk of 'currency wars' is overblown.
There's plenty of other overnight news. Briefly, Warren Buffett has launched a NZ$33 billion takeover bid for Heinz. That means he could end up owning the Watties business in New Zealand.
US jobless claims for the unemployment benefit plunged last week, showing US employers have little need to trim staff as demand improves.
In Europe, their economy contracted more than expected. The 0.6% decline in GDP during the fourth quarter means the euro zone has effectively been in recession since 2011, with Germany also succumbing to the malaise at the end of last year. It is hurting many companies, including carmakers. European policy makers are following a policy of austerity and tax increases.
The European Union’s executive proposed a financial transactions tax in 11 countries starting in 2014 to raise up to €35 billion a year (NZ$55 bln), a step that critics said would hit savers and pensions.
The Japanese economy also shrank unexpectedly last quarter. Falling exports and a business investment slump outweighed improved consumption, bolstering Prime Minister Abe’s case for more monetary stimulus to end deflation. Japanese policy makers are following a policy of additional stimulus.
In Australia, the CBA boss, Ian Narev is clear about not outsourcing jobs. He is the owner of ASB and he criticised controversial moves to outsource jobs to overseas workers, labelling the practice as short sighted and fraught with danger.
The Australian competition regulator is about to investigate the practices of the two major supermarket chains, one of which - Woolworths - operates in New Zealand under the Countdown brand. Our own research shows that it is cheaper to buy groceries here than in Australia.
The kiwi dollar starts today at 84.7 USc, 81.9 AUc, and the TWI is at 76.9.
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