David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand.
It is hard to imagine a bigger weather event than is hitting QLD and northern NSW right now. 150 mm of rain in an hour is massive. I hope that dam holds in Brisbane, and our thoughts are with everyone affected.
The costs to the state and the region will be enormous, and create distortions that will affect NZ. We will be monitoring these closely in the weeks ahead. There will be global impacts. As Bernard has observed many times, Australia might be a province of China, but we are a suburb of Australia in the world economy.
Those global impacts will include effects from the Australian wheat crop, and coking coal for steel production. Both have caused world-wide prices to rise already.
In other news, in somewhat of a surprise, Japan will join China in buying European debt, helping the Irish, Greeks, and Portugeuse debt-fund their economies. In fact, Portugal declared it wasn’t in any crisis and won’t be applying for EU bailout funds – a similar declaration was made by both Greece and Ireland, just before they did - although the Chinese and Japanese offers weren’t around then.
However, there was a modest recovery in the euro overnight, and European stocks rose.
Oil has jumped to over 91 US dollars after the US expert panel reported on the BP oil spill disaster, and their recommendations will raise the cost of drilling in the Mexican Gulf and delay any expansion there. It seems $2/liter at our pumps is just days away.
The Dow, gold, and copper prices were all up just a fraction overnight.
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