Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that gold and oil prices fell 1-2% overnight on renewed concerns about slowing global growth and less demand for commodities.
India raised its official cash rate by 50 basis points to 7.25% to slow down inflation, raising concerns demand from the emerging powerhouses of China and India would hurt commodity prices. See more here at Bloomberg.
The Peoples Bank of China also indicated yesterday it needed to fight harder to control inflation. See more here at Bloomberg.
However, that didn't hurt dairy prices too much in Fonterra's auction overnight, where the trade weighted index of products sold fell 0.1%. See full details here.
The Dow and the S&P 500 fell slightly on these concerns about slower global growth, which helped reduce the appetite for 'riskier' currencies such as the New Zealand dollar, which dipped under 80 USc early this morning.
The Kiwi dollar also fell against the Australian dollar to 73.6 Aussie cents. This followed comments from the Reserve Bank of Australia which suggested a rate hike there to 5% in August was likely, making the Aussie dollar more attractive than the Kiwi dollar where our official cash rate is stuck at 2.5% until next year.
However, the New Zealand dollar rose vs the British pound to 48.7 pence after very weak factory output figures from Britain and more talk it will keep its interest rates very low for longer as its economy struggles under heavy debts and an austerity drive.
Meanwhile, in New Zealand, there has been a call for New Zealand to offer a tax break to fund administrators, similar to those offered in Ireland and Luxembourg. The theory is New Zealand would become a funds administration hub.