A note to investors at Cornerstone Worldwide has reportedly stated that the world's financial tsunami has blown through Australia and New Zealand recently creating concerns of contagion across the Pacific region.
The Cornerstone Worldwide note apparently mentioned that the punishment suffered by financial shares in Sydney this week came after investor flight forced National Australia Bank (NAB) to slash a £400m bond sale by two thirds.
The retreat comes days after the Melbourne lender shocked the markets by announcing a 90pc write-down on its £550m holdings of US mortgage debt, an admission that it AAA-rated securities are virtually worthless.
Last week, New Zealand's central bank cut interest rates last week on concerns that the economy may have started edging toward a recession. Housing starts slumped 20pc in June to the lowest since 1986. Cornerstone Worldwide’s investor note speculated that the commodity boom in its mining sector has “taken some of the sting” out of the downturn but the government had still been unable to generate a current account surplus despite increasing revenues.
Shifting focus to the Antipodean currencies, the noted allegedly stresses that both the Australian and New Zealand dollars have fallen hard in recent days and now appear to be breaking down through key technical support against major currencies, including the US dollar.
