Here's my summary of the key news overnight in 90 seconds at 9 am, including news that Fairfax is selling its controlling interest in Trade Me. According to Australian reports, Fairfax decided to sell on Saturday morning, and later that day investment bank UBS was offering parcels to investment houses at A$3.05 per share, a 17c discount to its last trade. The sale will allow Fairfax to pay down debt, but will also remove some of the strongest earnings the Fairfax Group has. It paid NZ$750 million for Trade Me in 2006, and has now sold out in three steps for about NZ$1.4 billion.
In a new report, the OECD says the Reserve Bank of Australia may need to cut its benchmark interest rate further as their dollar’s resilience impedes economic growth, which it said will slow to 3% in 2013 from 3.7% this year. The OECD urged the government to abandon efforts to prop up industries such as carmakers that are struggling to adjust.
Early reports and estimates out of the US indicate consumer spending probably rose in November as Americans set aside the threat of higher taxes next year while shopping for the holidays. Sales of cars, electronics, and clothing all rose. Sales of existing homes in November are expected to show the fastest growth in three years when the data is release later this week. Sales of new home construction probably plateaued last month, but has been rising steadily all year.
The Kiwi and Aussie dollars rose at the end of last week, erasing earlier losses, after the 'flash' unofficial HSBC PMI showed Chinese manufacturing expanding at a faster pace, boosting trade prospects. And Japan has elected a new government promising to double its QE program, the goal being to try and get inflation up to 2%. Our currency starts this week 84.6 USc and 80.1 AUc; the TWI is at 75.4 holding the five-year high levels it reached last week.
This week we get three important reports on the local economy. Tomorrow we get the September current account, quickly followed the same day by Treasury releasing its half-year Economic and Fiscal update. And on Thursday we get GDP data for the September quarter. There are an interestingly wide range of opinions about this data, from 0% to 0.6% quarterly growth from the June quarter.
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