Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news that inflation in China surged in November to a 28 month high of 5.1%.
This increased expectations that Chinese authorities would tighten monetary policy to slow down an economy that is threatening to overheat.
Food price inflation hit 11.7% and retail sales grew 18.7% in November from a year ago. Factory output grew 13.3%.
However, contrary to some expectations, Chinese authorities held off on an increase in official interest rates over the weekend. It did increase the reserve assets ratio for banks for a third time, trying to slow down lending.
China's growth rate is crucial for New Zealand and Australia, given it is collectively our largest buyer of exports directly and indirectly.
Meanwhile in Australia, Treasurer Wayne Swan has unveiled reforms to the banking system designed to give more competition for the big four Australian banks.
Swan announced the abolishment of exit penalties for mortgages and plans for single bank account numbers to make it easier for customers to move banks.
It also announced plans to help building societies and credit unions find financing to create a 'fifth pillar' to compete the with the 'four pillar' banks -- NAB (BNZ), ANZ, Westpac, CBA (ASB).
However, in a surprise move, Swan also announced plans for all banks and building societies to be allowed to issue covered bonds, which are currently banned in Australia but not in New Zealand.
This will allow the big four to issue covered bonds offshore to refinance some of their short term borrowing.
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