Here’s my summary of the key events overnight that affect New Zealand, with news European markets have rallied, while the euro’s dropped to a seven-month low, as talk of aggressive stimulus from the European Central Bank gains ground.
Bank officials are considering staggering charges on banks hoarding cash and buying more debt. This is fuelling talk the ECB’s getting ready to take forceful measures to lift inflation and economic growth when it meets next week.
New capital expenditure in Australia has plunged by 20% over the year to September – its largest drop on record. Mining investment slid 30% year-on-year, while other investment fell by 5% – a sign the economy is struggling to transition to non-mining investment.
Staying in Australia, Fitch Ratings forecasts iron ore prices are likely to remain muted throughout next year. Affirming the ratings on Australia’s Fortescue Metals Group, it expects prices to average around US$50 a ton.
Iron ore prices sank to their lowest levels in at least six years on Tuesday, amid speculation mills in China are cutting back steel output, hurting demand for the raw material.
Fitch says global demand for iron ore has been weaker than anticipated, while supply hasn’t slowed as much as expected given the price slump.
The Japanese Prime Minister is pledging to raise the minimum wage and increase spending on social programmes to jump-start the flagging economy.
The government’s committing to giving cash handouts to the elderly poor, and building child and elder-care facilities to help people enter and stay in the workforce, as part of a stimulus package expected to cost at least NZ$37 billion.
It’s aiming to expand the economy, which has slipped into recession twice in two years, by 20% in the next five years.
In New York, the UST 10yr yield benchmark remains at 2.23%.
The US benchmark oil price remains just under US$43/barrel, while the Brent benchmark is just under US$46/barrel.
The gold price is at US$1,071/oz
The New Zealand dollar also remains fairly unchanged from yesterday at 65.7 US¢. It’s risen slightly to 90.9 AU¢ and 62.0 euro cents. The TWI-5 has stayed at 71.4.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »