Here's my summary of the key overnight news in 90 seconds at 9 am, including news there was a good dairy auction overnight.
Fonterra's auction platform sold 45,000 tonnes of product at 2.4% higher prices than two weeks ago. In NZ$, the rise was a more modest 2.0%. Still, the prices acheived were more than 50% higher than a year ago, in either currency. Fonterra's last report of early new season milk flows suggests it is going to be a big year.
In the US, the first Federal government shutdown in 17 years has done little to dent market confidence. It seems the financial markets are guessing that the work stoppage will end in time for lawmakers to tackle the nation’s debt limit.
The stoppage also suggests that the Fed's tapering will be pushed back.
The debt limit battle is the more important one, and October 17 is the day the money runs out.
International credit markets actually rallied. The Dow is unchanged in late trade, Oil is down, Gold is the only benchmark to post a significant reaction; it is now down to US$1,286/oz, a fall of almost US$50 or 3.5%.
US Treasury 10yr bonds are a yield of 2.64% and show no blowout at all on all the politics.
Part of the reason for confidence holding was very good American manufacturing data; their PMI for September came in better than expected, the latest in a string of positive factory results.
That followed good Chinese PMI results where gains were modest, but they were also a 17 month high.
In Europe, it looks like up to 40 of his MPs are ready to break with Berlusconi and support the centre-left government, breaking their political impasse.
In Australia, their Reserve Bank kept interest rates on hold for the second month, as improving data boosted hopes of a lift in their economy.
The NZ dollar starts today a little lower at 82.7 USc, 88.1 AUc, and the TWI is at 76.9.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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In the US, the first Federal government shutdown in 17 years has done little to dent market confidence.
If one considers the Fed controls the US economy and it's associated indicators, the unwind of Monday's $58.157 bn open market operations drain was a little more than enough to give the bonds and stocks the necessary puff.
Others were not so sanguine:
One would get a far different impression by looking at today's just concluded 4-Week Bill auction. Today's outlier rate on the just priced $35 billion in 4-week bills can be seen quite dramatically on the chart below, and is evidence that someone (or someones) is getting quite nervous ahead of the events in the next few weeks. Read more
This out from Gerry Brownlee this afternoon;
First compulsory acquisitions in Christchurch CBD
The Crown is using its post-earthquake powers of compulsory acquisition for the first time to ensure the crucial rebuild of central Christchurch is not held up, says Canterbury Earthquake Recovery Minister Gerry Brownlee.
“Progress to date by the Crown in purchasing central city properties has been very good, with the vast majority of land already secured for priority anchor projects without any compulsory acquisition being required,” Mr Brownlee says.
“However we have now reached the point where we need to compulsorily acquire a small number of properties.
“It is important for the recovery of the whole city that we push on with the development of these anchor projects, which will in turn give confidence to private sector developers to progress their own projects and benefit the whole economy.”
A proclamation has been signed for the compulsory acquisition of properties at nine addresses in the northern most four blocks of land designated for the new East Frame. Further compulsory acquisitions are likely to follow in other anchor project areas.
The properties are being acquired under Section 55 of the Canterbury Earthquake Recovery Act 2011. A proclamation to take land must be approved by both the Governor-General and Minister for Canterbury Earthquake Recovery, and publicly notified and gazetted, before the land is vested in the Crown on the fourteenth day after the day on which it is gazetted.
Compensation will be based on the market value of the property at the date of the acquisition. The owner and any other person who suffers a loss in the compulsory acquisition have the right to appear before the Earthquake Recovery Minister or his delegate to make representations on the compensation.
Properties to be compulsorily acquired by the Crown include those where the parties have been unable to reach agreement on price, and situations where compulsory acquisition is the most practical method to acquire those properties owing to the individual circumstances.
The Crown now owns 55 per cent of the total land area it requires for the Anchor Projects, which equates to 171 of the 345 properties. All purchases to date have been based on independent expert advice on fair values of land and built property.
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