Summary: Global investors were relaxed over the weekend about figures showing US inflation accelerated to 6.8% in November, its highest rate since 1982. The S&P 500 rose another 1% to a fresh record high on Saturday. Today, local investors will focus on cabinet’s decision due at 4pm on whether Auckland can go ‘orange’ this summer.

‘The Fed has it under control’ US CPI inflation rose to the highest annual rate since 1982 (6.8%) in November, reinforcing expectations about the US Federal Reserve being likely to signal a faster reduction in money printing and higher interest rates in its next monetary policy decision due on Thursday morning. Normally, both moves would weaken stocks, but investors welcomed the inflation figures as being in line with expectations and many in the market are confident the Fed can control inflation.

Will Auckland go ‘orange’? The last post-cabinet news conference of the year is at 4pm today, where prime minister Jacinda Ardern is set to announce whether to move Auckland down from ‘red’ to ‘orange’ for the summer, which would remove the 100 person limit at hospitality and events venues. This is the last chance for a change, given the next levels check by cabinet is not until Jan 17.

Tech exceptions Digital economy minister David Clark announced this morning the government had given class exceptions for 600 tech workers to be let into the country from early next year, including software and application programmers, ICT managers, ICT security specialists and multimedia specialists. The programmers, managers and security specialists must be paid at least $120k/annum, while the multimedia specialists have to get at least $95k.

Farm exceptions Agriculture minister Damien O’Connor announce the government would let in 200 mobile plant machinery operators, 40 shearers and 50 wool handlers. He also said the existing class border exception for 200 dairy workers had been changed to remove the previous split of 150 assistant dairy farm managers and 50 dairy farm assistants. “There’s huge demand for dairy farm assistants, so we’re providing more flexibility for our dairy sector to fill jobs up to the maximum of 200 where they see the strongest need,” O’Connor said.

Climate funding plan The government’s Half Yearly Economic and Fiscal Update (HYEFU) is due at 1pm on Wednesday after a lockup at Treasury. We expect detail on how funding will be arranged for next year’s Climate Budget, which could include a new ‘Vote Climate’ to wrap capital and operational spending from various ‘votes’ such as Transport and housing, and detail on how Emissions Trading Scheme credits revenue will be spent.

Resilient economy September quarter GDP figures are due at 11.45 am on Wednesday, with economists expecting a drop in output of around 4% because of the lockdowns, but less than initially feared of as much as 7%;  

FOMC meeting The US Federal Reserve’s last monthly monetary policy decision of the year is due on Thursday around 8am NZT. It is expected to signal a faster tapering of money printing and bond buying, before putting up the Fed Funds rate from May or June next year.

Europeans holding The ECB and Bank of England (BoE) are due to release their latest monetary policy decisions on Thursday night NZ Time. The ECB is expected to extend its money printing and bond buying programme beyond next March and the BoE is expected to leave its rate on hold until early next year as fresh covid waves rip through Europe over the winter.

Fresh on BusinessDesk this morning

Jenny Ruth takes a deep dive into whether agriculture minister Damien O’Connor will give the green light to Fonterra’s capital structure reform voted through by farmers last week.

Daniel Dunkley looks in depth at the glossier end of the magazine industry to find advertisers of high-end items such as couches are struggling with supply shortages.

Henry Burrell reports on the gaming industry successes coming out of the New Zealand Centre of Digital Excellent (CODE)’s grant programme.