Here's my summary of the key news overnight in 90 seconds at 9 am, including news of conflicting signals in the global economy.
The US economy grew at a “modest to moderate” pace in 11 of 12 Federal Reserve districts, with broad-based gains ranging from business services to construction and manufacturing, the American central bank reported in its Beige Book review earlier today. This helped push the US dollar higher.
Also helping were reports of good job growth, especially in the service sector, in the widely watched ADP survey.
At the same time, the maverick Dallas Fed boss was saying he had actually been reducing his monthly asset purchase under the Fed QE program since the start of 2013. Bernanke had suggested the pull back hadn't started yet. Credit markets were nervous, mainly because they have grown rich off the program, although most everyone is now expecting a reduction at some time. Equities have fallen quite sharply on the news, down more than 1% in late trade in New York. The Dow is now below 15,000 for the first time in a month.
In Europe, the IMF has admitted errors in the way it and the EU handled the Greek fiscal crisis. It is now saying it should have forced bond-holder losses much earlier, rather than socialising them.
An ugly trade spat has erupted between the EU and China. Firstly, the EU slapped anti-dumping duties on Chinese-made solar panels (against the wishes of the Germans and the British) to protect its local manufacturers. And now China is retaliating with anti-dumping duties against French wine. France has reacted badly to the move.
Australia’s economy may be teetering on the brink of a domestic recession as the resources boom falters, consumers restrain spending and businesses cut investment plans. Yesterday's GDP data showed it grew at its slowest pace in two years in the March quarter.
Domestic demand shrank in the quarter, the weakest figure since the height of the global financial crisis. The economy expanded at less-than-expected 2.5% over the whole year. Its currency was lower as traders increased bets on further interest-rate cuts.
Meanwhile - and perhaps taking advantage of the exchange rate - there are reports that Air NZ has increased its stake in Virgin Australia again to become its largest single shareholder.
The NZ dollar starts today at 79.3 USc, its lowest level since July 2012 - the same as the euro - and we are at the lowest level against the British pound this year, 83.3 AUc. Our TWI is down to 74.5, also the low of 2013.
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