IMF wants Germany to do more, worried about low interest rates; US budget deficit lower; AU jobs mirage; bond rates fall; oil and gold lower; NZ$1 = US$0.781, TWI = 76.1

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of dodgy Aussie jobs data.

But first, the IMF which is showing heightened concern over a slowing world economy, said overnight that cash-rich countries like Germany need to step up large public investments to help keep the flagging global recovery on track.

The comments from both the fund’s managing director and its lead economist reflect growing concerns within the IMF that Germany, which recently passed China as the country with the largest trade surplus in the world, is not doing enough to spur growth in Europe.

The same report expressed concerns that continuing low interest rates were leading investors to buy riskier assets as they seek better returns. They called for rates to rise to ensure investment decisions were being made on a more realistic basis.

Staying in Europe, the EU said overnight that it had approved plans for the construction of Britain’s first nuclear power station since the mid-1990s, after government subsidies for the project were reduced. The decision appears to clear most of the obstacles for the plant at Hinkley Point in southwest England, which would produce about 7% of Britain’s current power supplies. It won't be operating before 2023.

In the US, their Federal budget deficit fell by nearly a third during fiscal 2014 to US$486 billion as federal revenues grew far faster than spending. The US federal deficit will come in at 2.8% of US GDP and is entirely sustainable at these levels.

In Australia, the credibility of its monthly jobs figures - arguably the most crucial gauge of the economy’s health - have been thrown into doubt after the ABS confirmed problems with its July, August and upcoming September figures. Those amazingly good August employment numbers are likely to have been a mirage.

In China we should note that its Golden Week holiday has ended.

In New York, UST 10 yr yields have fallen yet again, now to 2.35%. In fact, NZ swap rates open today at their flattest in the 2-5 differential since December 2012. Central banks and the IMF may be seeing froth, but bond markets don't.

And the oil price has also fallen again and is now at US$87/barrel with the Brent price at US$91/barrel. Not only were US petrol and gas inventories higher than expected last week, official forecasts say fossil fuel demand will be lighter than expected this northern winter because temperatures are not expected to be so cold (last year's temperatures were a 10 yr low). Gold is down too, today at US$1,207/oz.

On the other hand, stocks are higher in late trade in New York.

We start today with our currency level a little lower against the US dollar than it was at this time yesterday. The NZD is at 78.1 USc, is at 89.2AUc, and the TWI is at 76.1. 

If you want to catch up with all the changes yesterday we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »