Here's my summary of the key overnight news in 90 seconds at 9 am, including news of a further retreat from risk.
As we reported yesterday, markets think the Chinese government is worried about surging house prices and are nervous about how they will tackle the problem.
It became clearer overnight that their central bank is holding back from providing liquidity that would support the housing rush, and that is causing their interbank lending rates to rise sharply.
At the same time, China took a significant step yesterday to deal with an explosion of borrowing among local governments by allowing more of them to issue short-term debt to help pay off maturing bonds and loans.
In the US, some key corporate earnings also worry investors. Caterpillar in particular disappointed, although there were below expectation results from some chipmakers too.
The two concerns - Chinese credit conditions and US earnings - have seen markets pulling back. In mid-day trade, New York equities are down about 0.5%, the oil price fell to US$95/barrel although it is up a bit since the low, and gold is down. US Treasury 10yr bond yields continue to fall - that is, Treasury bond prices are rising - with the yield now at 2.48%.
In Australia, the new government there has decided to give the RBA A$8.8 bln to replenish their depleted reserve funds. Some see these resources being used to defend their currency. The move however makes their budget deficit that much larger. Aussie inflation also came in higher than markets were expecting.
All this news has our currency down sharply on the overall retreat from risk.
The NZ dollar starts today at 83.9 USc, 87.1 AUc, and the TWI is at 77.0.
The easiest place to stay up with today's event risk is by following our Economic Calendar here ยป
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