Here's my summary of the key news overnight in 90 seconds at 9 am, including news that the Aussie dollar is sinking, pushing the Kiwi to almost an eight year high.
RBA Governor Stevens has called on Australia to face up to the spending cuts and tax reform that will be needed to get their federal budget back into surplus.
He pressed business leaders to support policy that backs the overall community rather than “themselves lapse into rent-seeking behaviour”. He also said he wants to see a AUD:USD exchange rate 85 USc - its currently over 89 USc even after this morning's fall.
International investors are preferring our currency to the Aussie these days.
In the US, early data released overnight for November retail sales is encouraging. They came in higher than expected, up 0.7% above October, and more positive than early anecdotal reports.
Not so good was an unexpected rise in initial unemployment claims last week. Actually, a rise was expected, but not this large.
There was disappointment in Europe too with industrial production in an unexpected slump in October, according to the data released overnight.
In China, they are expecting dairy prices to rise as the nation's fragmented domestic industry can't keep up with rapidly rising demand - in fact, they are reporting domestic supply is shrinking. Fonterra's inability to switch more production to milk powders will limit our ability to respond, although prices for powders will likely stay high.
Gold has also lost US$30/oz overnight, back to US$1,230/oz after a brief flirt higher over the past five days. Stocks are down in mid-afternoon trade in New York, and yields on benchmark UST 10yr bonds are up to 2.88%.
The NZ dollar starts today at 82.4 USc, 92.4 AUc, and the TWI is at 77.6.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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