Here's my summary of the key news overnight in 90 seconds at 9 am, including news Fonterra is caught up in a wide-ranging probe by Chinese authorities into their dairy industry.
Their probe over pricing has prompted some foreign makers of baby formula to say they will lower what they charge Chinese customers.
A Fonterra spokesperson said that they are cooperating with Chinese authorities. She said the government is “reviewing a wide range of consumer businesses in the Chinese dairy industry” and claimed Fonterra wasn’t being singled out.
Elsewhere, while the Americans are on holiday, markets reacted strongly to dovish noises coming from the Bank of England and the European Central Bank, both of which left interest rates unchanged today.
Both the BoE and ECB voted to hold rates at 0.5%, with the former announcing that it will also keep its monetary stimulus programme at £375 bln.
Mark Carney’s first meeting as Governor of the Bank of England was marked by the addition of a new element of “forward guidance” into their Monetary Policy Committee’s statement. Commenting on expectations in the market for rate rises as soon as 2015, Carney broke with the tradition by stating that these expectations “were unwarranted”.
The governing council of the ECB followed soon afterward and also gave forward guidance in a way not done in the past. The governing council stated that interest rates will remain at present or lower levels for an extended period time.
European stock markets surged on the comments, but their currencies fell sharply.
There is [should be] good news for coffee drinkers. Surging South American exports have pushed the cost of coffee beans down more than 10% and brings to a string of four years where production has exceeded demand.
And here's a headline you don't see every day. Apparently a NSW sheriff's officer walked into the headquarters of CBA, the parent of ASB, with a writ to seize $50,000 of TVs, artwork and furniture. A bank not paying its bills?
And finally, something to watch out for tomorrow. American non-farm payroll data will be released and is widely expected to to positive. If those expectations aren't met we will see a reaction on the currency markets with the Kiwi possibly pushed higher.
The NZ dollar starts today sharply higher against most currencies and 'benefiting' from the European announcements. It starts at 78.4 USc, 85.7 AUc, and the TWI is at 74.8.
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