US and Canadian jobless rates fall; flashpoints in Europe; Brexit vote faces court challenge; China condemns LBO rogues; UST 10yr yield settles to 2.39%; oil stable, gold recovers; NZ$1 = 71.4 US¢, TWI-5 = 77.1

Here's my summary of the key events over the weekend that affect New Zealand, with news of instability in Europe, and big issues in China.

But first, the American unemployment rate fell to a nine-year low of 4.6% in November, better than expected, as employers added another 178,000 jobs, making it almost certain that the Federal Reserve will raise interest rates later this month. That is now 11 mln new jobs added in the Obama Administration. But the social media hype is for the 1,000 Trump 'saved' - even though that deal sees 1,200 jobs going to Mexico anyway, and the actual number 'saved' may only be 800. Go figure. Facts are irrelevant in some people's echo chamber. Spin is winning. It is a worry. For the record, 145 mln Americans are now employed as at the end of November. Check back in four years to see how that number has changed.

Across the border, the Canadian jobless rate came in lower than expected at 6.8%.

Across the Atlantic, there have been a series of flashpoints and issues. Voting in the Italian constitutional referendum is underway and early results won't be known until about 11am NZ time. If the Italian government loses, it will likely collapse and a difficult path lies ahead for both Italy, and the EU.

Over the weekend, frantic efforts involving a highly complex, three-part rescue of the Italian Banca Monte dei Paschi de Siena, was underway with a NZ$7 bln fund-raising involving its bondholders, the Qatari government, a handful of Wall Street hedge funds, and the bank’s existing investors. Without the rescue plan in place, Italy's third largest and oldest bank will probably be wound down with all sorts of international ramifications.

In Austria, they had a re-run election for the ceremonial post of President. The two candidates are from either political poles, one a former Green Party politician, the other a Far Right candidate. The result was close again, but the Far Right candidate has conceded defeat this morning.

Across the border, in Switzerland, their Q3 GDP result was released over the weekend and it was a disappointing one. Growth stalled in the quarter.

In the UK, they are awaiting their Supreme Court hearing on Brexit. The question is, does it need a confirming vote in their parliament? Their government is not confident it will prevail in this court, so is preparing an end-run, retrospective law.

In China, the head of their securities regulator condemned "barbaric" leveraged company buy-outs by some asset managers using illegal funds. He said "You've ultimately become a robber in the industry, and that is unacceptable. That is not financial innovation." He was talking to an industry that has grown +600% in just 4 years, and is now worth NZ$10 tln, or 40 times the New Zealand GDP.

In New York, the UST 10yr yield will start the week following a good correction after the heady jumps last week, and is now down at 2.39%.

Oil prices held their Friday gains over the weekend and are marginally higher to start the week at just over US$51.50 a barrel for the US benchmark, while the Brent benchmark is now just over US$54.50 a barrel.

The gold price has recovered some of its sharp losses last week and is now back up to US$1,177/oz, a US$12 gain over the weekend.

The New Zealand dollar will start the week higher at 71.4 US¢. On the cross rates it is at 95.7 AU¢, and against the euro up at 66.9 euro cents. The NZ TWI-5 index is now up at 77.1.

If you want to catch up with all the local changes on Friday, we have an update here.

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