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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

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 ».

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23 Comments

The Herald (yes, the NZ Herald) shines a light on the disgusting immigrant "education' sector.
Ask an experienced teacher what needs to change on the front line of international education and the response is blunt.

"We need to blow the whole thing apart and start being honest about what's happening," says the teacher, who the Herald has agreed not to name. "Because it's not about education at all."

"I'd like to see New Zealand recognise that it's a scam, because that's at the heart of this. What's really behind it is they're coming for visas, not quality education."

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11759352

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and the surprise is? we have known this for ages

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Everyone knows about this and that it's been going on for years but did you read the dripping wet response from Stephen Joyce; muttering something about the "government" being worried about legal action from these dodgy providers. You couldn't make it up.

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Next up we'll have the government attack dogs doing a smear campaign on the SFO and the whistleblowers.

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Severe tax audits across the industry should take care of any such "legal" problems.

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KD. This is a Christmas cracker

You're not a thief until you get caught. People who finished a month before me, they've got their work visas. This is unfair."

So these folk are not doing any ethics, morality or civics papers. Or logic - having been caught.

It's too funny. People that think like this are crap workers anyhow. Pay them money to leave. Better set em off to Australia. Problem solved.

Hey but that's just like an opinion.

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There is widespread fraud from the so called students as well as their providers; deport the lot of them.
I am disgusted how lightly John Key and his lot value our reputation; the revelations of the Panama Papers, dodgy company registrations and now this all with the tacit approval of our morally deficient leadership.

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29,235 students (from India alone) last year. No wonder AKL has a housing crisis as it's AKL that has all these offending PTOs. This government are turning that city into an international cesspit.

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Turning?

Have you been to Auckland recently and had a good look around

Try turned

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Don't worry - it will disappear off the news inside 48 hours

Then it will bubble up again in 6 months time on a slow news day

If you wanted to really get het up about it you could ask if the wonders of imported IT technology skills could press a button where the IRD could tell us who of those who got in via PTE's in the past 5 years, got work visas, got permanent residency, got citizenship, how much they have earned, how much they are earning now, this year, how many are working, what jobs they are working in, how many aren't working, and how many are on welfare

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Well past time for this scam to be investigated and shut down. And as for those 'export' 'earnings' figures, let's have a closer look at who's really taking the profits for this criminal fraud.

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Joyce and Co are so big headed they just can't see that they are setting up the perfect conditions for NZ's own Brexit/Trump scenario. They can delude themselves with polls, but carry on with the lies, spin and inaction and they will get utterly smashed come election time.

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No they'll be fine. Anything that could bring their popularity into disrepute will be sealed up in the Pike River mine.

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apple now admitting they are also working on driverless cars, It will be interesting to see how quick this technology takes.
and all the driver jobs that they will replace
http://www.cnbc.com/2016/12/03/apple-says-its-investing-heavily-in-mach…

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Driverless cars are the next "3D movies are the future" or "home video phones are the future" or "hotels on the moon" or "VR is the future" or "Madam president Clinton" Take your pick. Not going to happen.

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...I guess you would have said the same to Henry Ford and Bill gates? The only thing to stop it will be world war and climate change. Entirely likely of course.

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Depends what you mean by driverless.

You can buy a number of relatively low priced models today that will maintain their position on the motorway in traffic and autosteer to stay in their lane without any human involvement.

Autobrake to avoid collisions. Hands off maybe a better description.

Driverless will I think be a series off incremental functionalities progressively implemented at ever lower costs to a wider range of vehicles.

Autobrake has already been legislated into the US 2018 model releases as standard.

Once you have used it - you turn it all on and never go back. It really is already very very good in motorway traffic.

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When I say driverless I mean no human is required to drive the vehicle on existing road infrastructure anywhere, anytime. In other words: A.I that can replace a human driver like a taxi driver. To be able to do that would require AI that is very close to human inegligence because the driverless car would need to interact with other human drivers on the road. It's a chicken vs the egg problem. In order to make a driverless car that can replace taxi drivers/humans, you would need to create an artifical human roughly speaking. But if we could create artifical humans, would we really need cars anyway?

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the biggest problem in NZ if it ever happens is our can do attitude.
wont be long before bill down the road decides he can service it himself.
as for happening, it is already in Europe and the USA with linehaul trucks being run driverless,
the amount of time you could save on a wellington run without having to stop for mandatory breaks is 2 hours

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There is a slight difference between the nice smooth dual carriage ways of Europe and SH1 in NZ.

We could shave 2 hours off the Akld to Wgtn just by straightening up all the roads, an adding in second lanes.

Imagine the fuel/time savings to the entire economy, imagine if it had been done 50 years ago.

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Have done Johannesburg to Cape Town in South Africa (1400 km) in the time it takes me to go from Auckland to Wellington. Some nice straights on the former where you can do 240-260 for a decent amount of time.

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Did Barfoots have a stellar month , its now the 5th. According to the Sunday newspapers now is the time to buy

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Substantial yuan depreciation, the most likely outcome in either the positive or negative scenario, will be perceived as China “exporting deflation” whereas this time around it will be “exporting inflation”.
https://ftalphaville.ft.com/2016/12/02/2180761/dont-blame-central-banks…

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