US job market grows; ECB delays stimulus decision; Putin defiant as oil price drops; UST 10yr 2.27%; NZ$1 = 78 USc, TWI = 78.4

Here's my summary of the key issues that affect New Zealand overnight with news of even weaker oil prices and tough consequences.

But first, US jobless claims fell last week, although not by quite as much as was expected. Fewer Americans signed up for unemployment benefits last week as employers retained staff to meet domestic demand for goods and services ahead of the holiday season.

Today's ECB meeting was something of a damp squib. No real decisions for action were taken although Mario Draghi did say that "technical preparations have been stepped up" for further measures if needed to revive the eurozone economy and that they will reassess stimulus plans in early 2015. They are finding taking action hard, although they did cut growth forecasts for the region. Oddly the euro strengthened on the non-decision.

In Russia, a defiant President Putin has warned Russians of hard times ahead and urged self-reliance in his annual state-of-the nation address to parliament. Russia is being hit hard by falling oil prices and by Western sanctions imposed in response to its interventions in neighbouring Ukraine.

Back in New York, UST 10yr bond yields were basically unchanged in trade earlier today, down marginally at 2.27%. 

The oil price is trading slightly lower today. The US oil price is now US$66/barrel and the Brent price fell back a little to US$69/barrel. Oil market analysts are debating if oil will fall to US$50. But in North Dakota, prices are already there. If that price spreads, Russia and Venuezela especially will take even more pain. (Russia has effectively imposed capital controls today.) On the 'plus' side of the price fall, China and other countries may use the opportunity to roll back or end subsidies and supports.

In contrast to the oil markets, equity markets are higher erasing yesterday's unusual drop. Wall Street was driven by good domestic confidence data and those lower jobless claims.

Gold is unchanged from this time yesterday at US$1,207/oz.

The kiwi dollar has risen overnight against the US dollar. We start today at 78 USc, 92.9 AUc its highest in almost five months, and the TWI is at 78.4.

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

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