90 seconds at 9 am: German angst

90 seconds at 9 am: Germany exasperated with France, doubles reserves; UK gloomy; US hiring picks up; China to ease interest rates; NZ$1 = US$0.825, TWI = 76.0

13th Mar 13, 8:45am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that Germany is criticising France for going easy on 'reform'.

France has admitted it will not meet the EU target of no more than a 3% deficit in 2013, a commitment President Hollande signed up to and promised in his election campaign. There are now more than 3 million unemployed in France.

Gold has pipped up overnight, threatening the US$1,600 level. The move higher follows those comments from the German central bank that the EU has not addressed the causes of the euro problems and more trouble could lay ahead.

The Germans are clearly worried about the future, and have doubled their reserves.

In the UK, things are getting quite gloomy. Inflation is rising, industrial production is down, and forecasters are anticipating a triple-dip recession. This may impact us as expats start heading home.

In the US, the fewest workers in at least 12 years were fired in January and job openings rebounded, showing employers are gaining confidence the American expansion will be sustained even as lawmakers battle to trim the federal budget deficit. There was particular strength in retail hiring. Equities are holding near their record highs.

In China, stocks continued their recent falling trend, and authorities are signaling that internal interest rate policies will be eased, which should allow savers there to earn more on their deposits.

In Australia, it is becoming clearer that the Government is likely to be swept away in the upcoming elections. RoyMorgan polls show an easy win for the Opposition. The Aussie currency is rising.

The kiwi dollar starts today basically unchanged against most currencies at 82.5 USc, lower against the Aussie at 80.0 AUc, and the TWI is at 76.0.

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2 Comments

by Henry_Tull | 13th Mar 13, 9:48am 1363121289

When pigs float:

Come in number 3233, where are the rest

http://www.scmp.com/news/china/article/1188204/number-dead-pigs-found-s…

Chinese officials have found a total of 3,323 dead pigs in a Shanghai river as of Monday afternoon and discovered swine virus in one of them, but they have stressed that the disease is not known to be infectious to humans.

The virus is known as Pocine Circovirus type 2, or PCV-2, a statement posted on Shanghai Agricultural Commission’s official account on China’s Twitter-like Sina Weibo said on Monday morning. The statement stressed the virus is not known to cause disease in humans but noted China had seen an increasing occurrence of this kind of virus causing sickness in pigs.

Based on the labels found on the dead pigs’ ears, officials said the pigs were raised in Jiaxing, Zhejiang province, which is located on the upper reaches of Huangpu River.

Jiaxing local media reports last week said more than 18,000 pigs from one village had died from illness in the last two months. The reports have sparked fears that residents dumped all of the diseased animals in the river.

by John | 13th Mar 13, 11:28am 1363127328

Of course Germany are unhappy with all the other members of the Euro, as the chief benefactor of the Euro, they will not leave it or wish others to leave it as their currency will appreciate and therefore they will lose there competitveness. They wish to control the situation.

This would be no different to an NZ:Aus dollar tie up, overnight we would become less competitive while Austalia would become more competitve as our dollar would effectively rise and there dollar would effectively fall.

Currency union can only occur amongst equals to avoid economic tensions.

The PIGS don't need to leave the Euro, they need to kick out the Germans. and then maybe the French.

Let the Deutchmark appreciate so that a VW Golf does not cost less than a Toyota Corolla, this is only possible as the Germans are members of the Euro, at the cost of all the other member states.