European markets rally, euro falls ahead of ECB meeting; New capex in Australia suffers record fall; iron ore prices to stay low for longer; Japan ups social spending; UST 10yr yield 2.23%; gold & oil stable; NZ$1 = 65.7 US¢, TWI-5 = 71.4

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 »

Daily exchange rates

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var tabs_count="7";
var csvfiles_loc= ["/charts-csv/chart_data/exchangerates/daily-usd.csv"," /charts-csv/chart_data/exchangerates/daily-aud.csv"," /charts-csv/chart_data/exchangerates/daily-twi.csv"," /charts-csv/chart_data/exchangerates/daily-yen.csv"," /charts-csv/chart_data/exchangerates/daily-yuan.csv"," /charts-csv/chart_data/exchangerates/daily-eur.csv"," /charts-csv/chart_data/exchangerates/daily-gbp.csv"];
var chart_title_arr= ["US dollar","Australian dollar","Trade weighted index","Japanese Yen","Chinese Yuan","Euro","British pound"];
var chart_subtitles_arr= ["Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate","Daily benchmark rate"];
var tab_titles_arr= ["US$","AU$","TWI","u00a5en","u00a5uan","u20acuro","GBP"];
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else if(arr.length == 536)
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var b=2;
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// to generate the format for date representation in x axis

var timestamweek = 604800000;
var timestamday = 86400000;
var timestammonth30 = 2592000000;
var timestammonth31 = 2678400000;
var timestamyear = 31536000000;
var timestamquarterly = 7776000000;

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var yy = "20"+fomat.substring(k2+1,k3+1);
var yy1=fomat.substring(k2+1,k3+1);

// conversion of months into numerical form

//+++++++++++++++++++++++++++++++++++
if (mm == "Jan")
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mm= "01";
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else if (mm == "Feb")
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mm= "02";
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else if (mm == "Mar")
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mm= "03";
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mm= "04";
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mm= "06";
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else if (mm == "Jul")
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mm= "07";
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mm= "08";
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{
mm= "09";
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mm= "10";
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else if (mm == "Nov")
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mm= "11";
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else if (mm == "Dec")
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mm= "12";
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do {
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do {
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var k3=k;

var dd= fomat.substring(0,k1);
var mm = fomat.substring(k1+1,k2);
var current_year=""+new Date().getFullYear();
var c_year=Number(current_year.substring(2,4));
var c_data=Number(''+fomat.substring(k2+1,k3+1));
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var yy = “19”+fomat.substring(k2+1,k3+1);
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var yy = “20”+fomat.substring(k2+1,k3+1);
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// conversion of months into numerical form

//+++++++++++++++++++++++++++++++++++
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mm= “01”;
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mm= “02”;
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mm= “04”;
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mm= “05”;
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mm= “06”;
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mm= “07”;
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mm= “08”;
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mm= “09”;
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mm= “10”;
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else if (mm == “Nov”)
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mm= “11”;
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else if (mm == “Dec”)
{
mm= “12”;
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// +++++++++++++++++++++++++++++++++++++++++++++++++++++++

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var timestam_1 = Date.parse(date);
var timestam= timestam_1+86400000; //86400000 added to get correct timezone output from Date.parse
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var dd2 = time4.getDate();
var mm2 = time4.getMonth();
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var ahref_title=”Click here for full story”;
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var url=arr[i][2];
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var yy3 = yy2+””;
var yy4= yy3.substring(2,4);
//++++++++++++++++++++++++this for days conversion++++++++++++++++++++++++++++
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Weeko = “Thu”;
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Weeko = “Fri”;
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else if (Weeko==6)
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Weeko = “Sat”;
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Weeko = “Sun”;
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//+++++++++++++++++++++++this is for month conversion+++++

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mm2 = “Jan”;
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mm2 = “Feb”;
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mm2 = “Mar”;
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mm2 = “Apr”;
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else if (mm2==4)
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mm2 = “May”;
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mm2 = “Jun”;
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mm2 = “Jul”;
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mm2 = “Aug”;
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mm2 = “Sep”;
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mm2 = “Oct”;
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mm2 = “Nov”;
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var yy = "20"+fomat.substring(k2+1,k3+1);

// conversion of months into numerical form

//+++++++++++++++++++++++++++++++++++
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mm= "01";
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else if (mm == "Feb")
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mm= "02";
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else if (mm == "Mar")
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mm= "03";
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else if (mm == "Apr")
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mm= "04";
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mm= "05";
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else if (mm == "Jun")
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mm= "06";
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else if (mm == "Jul")
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mm= "07";
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else if (mm == "Aug")
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mm= "08";
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else if (mm == "Sep")
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mm= "09";
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mm= "11";
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else if (mm == "Dec")
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var Weeko = time4.getDay();
var dd2 = time4.getDate();
var mm2 = time4.getMonth();

var yy2 = time4.getFullYear();
var yy3 = yy2+"";
var yy4= yy3.substring(2,4);
//++++++++++++++++++++++++this for days conversion++++++++++++++++++++++++++++
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else if (Weeko==2)
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else if (Weeko==3)
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Weeko = "Fri";
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else if (Weeko==6)
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Weeko = "Sat";
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else if (Weeko==0)
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Weeko = "Sun";
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//+++++++++++++++++++++++this is for month conversion+++++

if (mm2==0)
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mm2 = "Jan";
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mm2 = "Feb";
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else if (mm2==2)
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mm2 = "Mar";
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else if (mm2==3)
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mm2 = "Apr";
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else if (mm2==4)
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mm2 = "May";
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else if (mm2==5)
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mm2 = "Jun";
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else if (mm2==6)
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mm2 = "Jul";
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else if (mm2==7)
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mm2 = "Aug";
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else if (mm2==8)
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mm2 = "Sep";
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else if (mm2==9)
{
mm2 = "Oct";
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else if (mm2==10)
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mm2 = "Nov";
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else if (mm2==11)
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mm2 = "Dec";
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//++++++++++++++++++++++++++++++++++++++++

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// Daily
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fomat2=mm2+”-“+yy4;
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fomat2=mm2+”-“+yy4;
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decpad = parseFloat(arr[i][1]);
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arr[i][1] = decpad;
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var xvalu=dd2+”-“+mm2+”-“+yy4;
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}

}
}

//other required functions

//chart configuration starts here

function getXMLHttpRequest(file) {

//var arrSignatures = [“MSXML2.XMLHTTP.5.0”, “MSXML2.XMLHTTP.4.0″,
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req.send("");
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lineCSV[lineCSV.length-1]=lineCSV[lineCSV.length-1].replace(/^s*|s*$/g,"");
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}
fstart=-1;
}
}
fstart = (lineCSV[i].match(/^"/)) ? i : fstart;
}

var j=0;

for (var i=0;i<lineCSV.length;i++) {
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CSV[j] = lineCSV[i];
j++;
}

}

return CSV;
}

function roundVal(val_num){
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var result = Math.round(val_num*Math.pow(10,dec))/Math.pow(10,dec);
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function setdecimalpoints(deca)
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var deca1= deca;
var deca2= parseInt(deca);
if((deca1-deca2)!=0)
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return 2;
}
else
{
return 0;
}
}
for(i=0;i

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