The market is down 18. The SFE Futures were down 9 this morning.

The Dow Jones closed up 1 point overnight after closing down 172 on Friday. The US federal budget deficit dropped from $135.9bn in May 2010 to $57.6bn in May 2011. The consensus expected a fall to $59.0bn. The SFE Futures were down 44 on Saturday morning, but were down 9 this morning. The oil price fell $1.99 to a 4-week low of $97.30 as Chinese demand slowed. Gold was down $13.60 to 1515.60 and the Aussie dollar fell to 106.13 from 106.34c.

In the news today…

  • Market Bouncing on Chinese economic numbers out this morning — inflation at 5.5% up from 5.3% … high but only as high as expected.  Industrial production strong in line with expectations.
  • Insurance Australia Group (IAG) said it is “far too early” to assess the cost of the latest earthquakes to hit Christchurch but they are expecting to see a further tranche of claims. They say natural peril claim costs for the financial year are likely to be higher than the previously forecast $540m. IAG has also said it is looking to “accelerate growth in Australia and New Zealand and to boost our Asian footprint,” with a target of getting 10% of the company’s gross written premium from Asia by 2016. IAG down 0.6% to 354c.
  • Air New Zealand says they are open to expanding their ties with Virgin Australia (VBA) beyond their trans-Tasman joint venture and code-sharing on flights in Australia and New Zealand. This comes after the US Dept of Transportation gave Virgin final approval for their joint venture with Delta Air Lines for flights between Australia and the US. Chilean volcano delays not helping. VBA down 3.3% to 30c. QAN unchanged this morning.
  • Infigen Energy (IFN) said it has agreed to sell its wind-power assets in Germany to a Europe-based renewable energy fund for €154.6m. The sale requires approval from German regulators, and Infigen said the proceeds will be used to amortize debt. IFN unchanged at 33c.
  • Fortescue Metals Group (FMG) said Australia’s proposed mining tax is unfair and that it will hit the company harder than bigger rivals BHP Billiton, Rio Tinto and Xstrata. They say the tax would cut FMG’s value by at least 5%. FMG down 11c to 621c.
  • Hedge funds holding more than $2bn worth of Centro Properties (CNP) debt are said to have offered to sell their share of the debt to Lend Lease (LLC). Lend Lease rejected the debt offer, but remains interested in purchasing Centro’s $7.2bn Australian portfolio of shopping centres. CNP down 4.1% and LLC down 1%.
  • Italians voted on the weekend to remove laws passed last year to restart a domestic nuclear energy program, removing the framework to develop nuclear energy production facilities in Italy. This comes after Germany agreed on a nuclear phase out plan last month. Paladin down 8.2% and Energy Resources of Australia down 6.8%.

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