Aussie budget update risks seeing AAA rating lost; Bridges and Adams winners in English's Cabinet; Obama points finger at Putin for hacking; UST 10yr yield at 2.60%; oil and gold up; NZ$1 = 69.6 US¢, TWI-5 = 76.3

Here's my summary of the key events from over the weekend that affect New Zealand.

Australia is bracing itself for the potential it will lose its AAA credit rating, when its mid-year budget update is released today. Economists believe there is a 50/50 risk the country's rating will be downgraded, if its budget has deteriorated since May, as to delay a projected surplus in 2021.

A downgrade would hit confidence, raise borrowing costs and be a huge embarrassment for the government. It would also be the first downgrade since the 1986 currency plunge and "banana republic" crisis. It took Australia until 2011 to win back its AAA rating from the three leading ratings agencies. 

Barack Obama says evidence that Russia sought to hack the US election on behalf of Donald Trump, is convincing. Speaking at his end-of-year news conference on Saturday (NZ time), he admits to in September, personally telling Vladimir Putin to cut out the hacking. Yet he wouldn't weight in on whether Russian hacking swayed the election. 

Obama also says "Ronald Reagan would roll over in his grave" if he knew over a third of Republican voters approve of Putin - the former head of the KGB. 

Back home, Prime Minister Bill English has taken a steady as she goes approach in naming his first Cabinet yesterday. Simon Bridges and Amy Adams have walked away winners, while Judith Collins and Nick Smith have been demoted down the list. With Steven Joyce as Finance Minister, Bridges will become Economic Development Minister. Adams will become the Minister of Social Housing and Housing NZ Corp, and has also been given the new role of Social Investment.

Collins has lost her police portfolio to Paula Bennett. Paul Goldsmith has lost his role as Minister for Commerce and Consumer Affairs to Jacqui Dean, who like Goldsmith before the re-shuffle, isn't in Cabinet.

New data shows US homebuilding fell more than expected in November. It tumbled from a nine-year high as construction activity declined broadly - the latest sign of slower economic growth in the fourth quarter. But the housing market remains on solid ground, as permits for the future construction of single-family homes, the biggest segment of the market, rose to a nine-year high.

In New York today, the UST 10yr yield has stabilised at 2.60%.

Oil prices have risen since the end of last week. The US benchmark is at US$52 a barrel, while the Brent benchmark is at US$55.

The gold price has regained some lost ground, to reach US$1,135/oz.

The New Zealand dollar has continued to trend down to 69.6 US¢. It's at 95.4 AU¢ and 66.7 euro cents. The TWI-5 has dropped since Friday to 76.3.

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

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