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Live. Good morning. Welcome to

the program. I'm Whitney

Fitzsimmons. In 'Business

Today' - upbeat forecast, Ben

Bernanke says the US recession

may end this year. Steady approach, Australia leaves

rates unchanged despite

negative data. And career

shift, the new reality for

laid-off male workers. Those

stories coming up shortly but

first let's take a quick look

at the markets:

For more on the market action

I'm joined by Chris Weston from

I'm joined by Chris Weston from

IG Markets. Wall Street has

dipped as investors take

profits? That's right. Profit

taking was the order of the

day. Cautious trading can be

sold in the lower volumes that

came ut. There was a lack of conviction in the day's trade.

We saw the markets opening

slightly higher, trading to a

high of 907 on the S and P.

We're seeing strong technical resistance along

resistance along these level

scpedz I think we saw the

market come down from there,

1917 to 918 on the S and P. Wea

a better than expected reading

than the OSM service sector

which helped propel the markets

to those levels. We've got

major hurdles in the upcoming

days we've got job claims on

Thursday, nonforms on Friday

and the stress test Thursday

financial night. People rolling out of

financial stocks, again

preparing for what they're

seeing there. The financial

sector was down 1.2, big losses

in wells Fargo, JP Morgan and

Bank of America and very

cautious trading in the US,

finishing 0.4% on the S and

P. London's Footsie surged to

its highest level since

January? That's right. We saw

around it close up 2.2%. It closed

around 43.36. It had to factor

in a lot of what's happened in

the US. It was on a break

yesterday for the May bank

holiday. A good session. It

rallied and then plateaued for

those of the session. Commodity

producers doing well. We've

seen a good jump in China's PMI

the other day. Financial stocks

gaining 6.7% as a factor. The

stress test may not be as

stressful as people once

anticipated so a good session

on the UK. I think it's the highest level since early

January. And looking at the

region, how will markets

perform today? Japan's on

another holiday. We have seen

the Australian market open

around 39.02 levels and that's

up about 0.3%. We have seen the

S and P futures come och a bit. It's going to tough to gauge

how the market is going to

trade. People are going to look

closely at the Westpac result

which was in line with

expectations and the bad debts

had high as well. The hang seng

is expected to open around 165

levels. It will be strange to

see how the market pans out for the rest of the

the rest of the day. Oil has re

treated, how is gold looking?

We saw oil down 1.2%, people

looking at that inventory

report tonight expecting gains

of 2.5 million. Gold, we didn't

see it fall down 0.6%, people

expecting the US dollar to

continue appreciating which is

gold negative and we did see

gold - US dollar strength last

night. We saw it come down from

night. We saw it come down from

a high of 916 below 900 now.

It's looking a bit weaker.

Economic data, what can we

expect to see today?

Obviously, the Nikkei's closed

today. We're not going to see

much from the Asian regions.

Weir looking for seasonably

adjusted sales out of

Australia, expecting growth

previous after a contraction in the

previous month. We're expecting

both of them to move the mark

toots a degree and in Europe

we've got retail sales and in

the US ADP employment change

later. Thank you. Chris Weston

from IG Markets. Now let's take

a look at what's happening with

currencies and commodities.

In its most upbeat assessment

of the US economy since the recession began, Ben Bernanke

says he expects a return to

growth later in the year. The

Federal Reserve chairman told

US Congress he expects the

recession to end this year,

provided there's no major

financial setback. According to

Dr Bernanke, both the housing

market and consumer spending is

steady but he says the recovery

will be slow and more job

losses in the US are

inevitable. Most recent

information on it labour

market, the number of new and

continuing claims for unemployment insurance through

late April suggests we are

likely to see further sizable

job loss scz increased

unemployment in the coming

months. However, the recent

data also suggests the pace of

contraction may be slowing and

they include some tentative

signs that final demand,

especially demand by household,

may be stabilising. Mr

important factor Bernanke says the most

important factor in his

forecast is the continuing

gradual repair of America's

battered financial system.

Indonesia's Central Bank has lowered its benchmark interest

rate to 7.25% in an effort to

boost consumer spending and

stimulate growth. The 25 basis

point cut was in line with

expectations as Bank Indonesia

tries to cushion the impact of the global downturn

the global downturn on

southeast Asia's largest

economy. The bank has forecast

growth will slow to between 3

and 4% this year from just

under 6% in 2008. Meanwhile,

Australia's Central Bank has

decided to leave interest rates

on hold at 3%, pointing to

improvements off shore and a

boost by stimulus measures at

home. The RBA also says

interest rates probably won't

be redees fr deuced much

further. The lannests got what

they expected - the analysts

what ga got what they expected.

The amalings cash rate remained

anchored. What surprised many

was the positive tone from the

Reserve Bank. It pointed to

further signs of stabilisation

in several countries, a Chinese economy speeding up and the

fact lower interest rates and

Government spending at home will provide significant

support over the period ahead.

I think the Reserve Bank is

comfortable with the current

cash rate because we're

starting to see the first signs

of past interest rate

reductions are having an

impact. That was evident in

building approval numbers. They

rose for the second month in a

row and both month lay

increases are strong. The data

markets and the RBA statement left

markets more coshing about

future interest rate relief.

The expectation is there may be

one more 25 basis point rate

cut coming in June but beyond

that nothing more. Despite the

more positive tone, the Reserve

Bank acknowledged that

businesses still doing it

tough, curtailing investment

plans and facing tighter

lending standards. A Chamber of

Commerce and Industry survey

showed two indices

showed two indices measuring

current conditions and

expectations falling to record

lows during the March quarter,

well below gift which is the

break even point. It also shows

business cutting investment and

jobs. On both those accounts

we think business needs the

benefit of Firth rate

reductions. If it wasn't for the economic stimulus in it system,

system, the impact of monetary

policy so far, weald see

unemployment rates much higher

than they are now. Those

higher un employment rates on

are their way. To look at the

impact of these moves on

currency markets and the inflation story across the

region ic I'm joined by Sean

Callow, senior currency

strategist at Westpac. Good

morning. This rate decision in Australia was

Australia was widely expected.

Did we see any major moves in

the dollar some I wouldn't say

major. There was a small rise

in the dollar about 30 pips or

so just straight after the

decision because there had been

about a 20% probability priced

into the interest rate markets

that there with bead a surprise

25 basis point cut so when it

was confirmed there was no cut and that the RBA

and that the RBA sounded

reasonably upbeat overall in

the statement then there was

just a small rise in the Aussie

dollar. We've seen what the

RBA governor Glen Stevens calls tentative signs of

stabilisation in China. What

sort of impact has that had on

the currency? It is a story

that's been running for a few

weeks now. We've had a lot of

positive statements from

Chinese officials and the RBA's

Chinese officials and the RBA's obviously watching that very

closely given that China's

Australia's number one trading

partner now so that has been

taken on board by the RBA. It's

had an impact on the commodity

markets as well, the prices

there trending higher over the

past few months. Not exactly

screaming, not getting back to

where they were last year by

any means but certainly

positive and if China is looking more upbeat than

looking more upbeat than that's

obviously a good sign for else

where in the region too. And Sean Callow, looking else where

in the region, as we've heard,

Indonesia's Central Bank has

cut interest rates so was that

decision expected? That one

really was, yes. We've had a

couple of surprises from Asian

Central Banks recently but that

one was very much expected.

Essentially, Indonesia has had very high interest rates

very high interest rates in

recent years and so they've

been shaving those for the past

few months so we got another

quarter per cent cut to 725

yesterday so that was received

in - taken in stride by the

markets. What was the trtsing,

I guess, was that there was a

reference to perhaps the

Roubini being even a touch

stronger than they might have

hoped -

hoped - might regard as

comfortable. I'll get to the

rupiah in a moment. Indonesia's

also had a high inflation rate

so what sort of impact will

that have? It does limit how

low rates can go in Indonesia.

The inflation rates have come

well down from the double

digits we saw a year or two ago

but they're still running

around about the 7 to 8% range.

We expect them to trend a little bit

little bit lower but even the

Central Bank Bank Indonesia

isn't expecting them to fall

behind about 5% so when

inflation is relatively sticky

from that point of view then we

wouldn't be expecting to see

some of these super low

interest rates in Indonesia

that we see else where in the

region and the rest of the

world. Let's look at the

rupiah. We've seen it strengthen

strengthen in recent months, as

you mentioned. Can you tell us

your take on this story? It's actually strengthened a great

deal, particularly if we take

the past two months, it's up

about 15% versus the US dollar.

Along with the Korean waun,

they've been the two strongest

currencies ing the region over

the past couple of months.

Partly influencing that is

Partly influencing that is

improved optimism in global

markets. The stock rally

starting in the US so in

general people are willing to

take on more risk. We suspect

that that's probably getting

close to an end and that the

market is probably getting a

little bit ahead of itself in

terms of the sustainability of

a global recovery and therefore

we wouldn't be expecting to see

much more up side on the

rupiah. Just staying with that

for a moment, you mentioned

that it's been gaining for

quite some time and that's off

the back of increased risk

appetite but has there been any

other elements that have led to

this, such as change in Government policy or anything

like that? Actually, politics

is certainly relevant, I think

specifically for Indonesia

there was a lot of buying of

the rupiah very much out

performance when President S PY

did well in the initial polls,

the regional elections and

looks on track to be re-elected

President. I thin that was taken positively by the

markets. He's regarded quite

well by foreign investors and they'd like to

they'd like to see him re-elected. There have been a

couple of hiccups in that

regard in terms of the

stability of the Coalition,

whether they'll get ongoing

support but overall that's been

a factor that has seen the

foreign investors buy the

rupiah in recent months. Moving

away from Indonesia and looking

at the reenling on the whole,

we've seen inflation is pretty

much abated across the area

much abated across the area but

are there any outlying

exceptions there? Not too many

in terms of the trend for

inflation rates has certainly

been very clear over the past

year, particularly as the sharp

rise in food prices and oil,

which really was still the

dominant factor little more

than 12 months ago, that was

seen as actually the key policy

seen as actually the key policy

challenge, believe it or not,

it seems a long time ago for

Asian policy makers but those

year over year rates have been

receding for quite some time

with oil prices in particular

lower but as noted, places like

Indonesia, some of them are

proving a little bit sticky.

Once you take out the effect of

energy prices and food prices,

the improvement in inflation is

not quite so impress

not quite so impress ive. Sean

Callow, we're nearly out of

time but I want to touch on

monetary policy. How effective

are policy movements in Asia,

given the high level of savings there? Erators good question.

Really they're not quite as

effective as else where in the

world, as we've seen with

China, they've only tweaked

their rates so fiscal policy is

particularly potent so monetary policy can only

policy can only go so farryism

think most of the rate cuts in

Asia have been delivered so at

the moment there's more of a

burden on fiscal policy and

hopes global trade picks

up. Sean Callow, we have to

leave it there but thanks for your time today. You're welcome.

Australia's biggest bank

Australia's biggest bank

Westpac has reported a flat

first half net profit of $1.6

billion. Analysts will be

looking at the cash profit of

1.7 billion, down 6%, on the

same time last year that. Was

largely due to its bad debt

write-downs which rose to $1.2

billion in the half. The bank

is cautious about the outlook,

saying the strong cash revenues

seen in the first half are

unlikely to be repeated this

unlikely to be repeated this

year. Investors will receive an

interim dividend of 42 cents.

Switzerland's biggest bank UBS

has confirmed it made $1.5

billion loss during the January

to March quarter. The bank says

the result was driven by

write-downs on risky

investments but was an

improvement on its previous

quarterly loss. It says markets

have improved in the early

have improved in the early

months of the year but the

global economy continues to deteriorate. The initial

results were rejected by the

bank on 15 April when it

announced 8700 jobs would be

cut. UBS has been hit hard by

the credit crisis and is being

investigated by US authorities

over a possible tax fraud. As

we heard earlier, there's

uncertainty over how America's banks will fare

banks will fare in Government

stress tests. 10 of the 19

banks subject to the tests

might need to raise more

capital and those affected may

include banking giants wells

Fargo and Bank of America nchlt

the Treasury came up with the

idea of stress tests for the

big banks to see if they could

weather an even deeper

recession. Wall Street is not

expecting the 19 banks being

tested to pass with flying colours. After weeks

colours. After weeks of number

crunching, tense negotiations

and a few leaks, the

expectation is some banks need

to raise more money. We're

going to find out there are

banks in the next six months

who will go to the private

sector and try to raise capital

and if they can't they'll be

the next recipient of tarp

funds. This ends months of

uncertainty about the banks. This will mark the beginning of

This will mark the beginning of

the end of this severe banking

crisis. I don't think the

crisis comes to an end however

until the banks actually do

raise the capital they need and

then ultimately begin lending

more freely again. The White

House says it doesn't expect to

provide more public funds. The administration doesn't believe

that we need to go to Congress

right now looking for more

money. But economist Nouriel

money. But economist Nouriel Roubini, sometimes called Dr

Doom and called the downturn

before others, says the stress

test weren't stressful enough.

The risk is we keep alive

zombie banks like Japan and

might lead to a more protracted

credit crunch and weakness of

the economy. Auto analyst s

divided on whether the

divided on whether the ambitious acquisition program

Fiat is launching will pay off.

Fiat's CEO is staking his

reputation on the strategy.

Less than two years into his

position at the helm of Fiat,

Sergio Marchionne made an

ambitious pledge, to triple the group's profits and turn the company into

company into one of the top

three mass market auto makers

by 2010. A year shy of that

deadline, Fiat seems to be well

on its way. It's a far cry from

five years ago when Fiat group

was racing towards insolvency

and screeching to a halt with

more than $12 billion in losses

accum ulated over five years. A

heart break for the

110-year-old company whose cars

and image were part of Italy's cultural

cultural landscape. Italy's

largest manufacturer saw its

market share dropping to just

28% in 2003, down from 52% a

decade earlier. With brands

like Fiat, Alpha Romeo, Ferrari

and Maserati under its

umbrella, the company's

management structure was

criticised. Enter Sergio

Marchionne, a relative unknown

in the auto world, this former accountant from

accountant from Toronto,

Canada, stepped in and shook the once family controlled

business to the core. He

stripped it clean of many

layers of top management and

scrapped plans for any designs

that had no marketing or profit

potential. September 2007, Fiat

launched a remake of the iconic

mini car from the 1960s made

famous by Fellini's 'La Dolce

Vita'. Since the overhaul, Fiat

Vita'. Since the overhaul, Fiat

has seen profits rise in 15

consecutive quarters and while

2009 saw a loss in the first

quarter, this potential deal

with GM Europe and Chrysler

could see Fiat generating

annual revenues of $100 billion

and it could sell between 6 and

7 million vehicles a year,

putting Fiat just behind

leading car maker Toyota.

Despite the decision by

Australia's Reserve Bank to

leave interest rates on hold

thrrkz data pointing to the

depress ed state of the

business sector. Demand for

credit has buckled with credit

cards and property loans the

two main areas where companies

are cutting back. Credit

reporting agency Veda Advantage

normally releases an index of business demand for credit every six months

every six months but with the

company in such a fragile

states it's prepared numbers

from January to March. The

overall result was down 8.3% in

the March quarter last year, concerning but not surprising.

The biggest falls were in

business credit card applications, property loans,

commercial rental and hire

purchase. For Veda Advantage's

Russell Evans, it's a sign that

businesses are changing the way

businesses are changing the way they operate. Australian

businesses are relying more son

than they have in the past on

their own working capital to

fund their businesses. They're

relying on their ability to

transform invoicinise to cash

flow to fund their businesses

on a day-to-day

perspective The lack of desire

for credit doesn't bode well for the economy in the

short-term. You would expect business

business investment to fall

away this year from the record

levels set in recent years so

that will be a negative growth

and one of the key drivers of

the downturn. The Commonwealth

Bank in conjunction with the Australian Industry Group has

released its latest performance

of services index, covering

two-thirds of the economy. Like

Veda Advantage's index of demand for business credit,

demand for business credit, it

remains at an historic low.

These figures confirm the

nonfarm economy has been in

recession in the last three

quarters. There are signs of

life with building approval s

rising for the fourth

consecutive month and these

signs prompted the Reserve Bank

to leave the official cash rate

at 3%, noting much of the stimulus pump under to

stimulus pump under to the

economy in recent months has

not yet had time to work a

decision which disappointed the

business community. We're

going to see further detear ytion with respect to

employment, further jobs

deterioration and also further

deterioration in terms of

business investment so on both

those counts we think business

needs the benefit of further rate reductions. America's

recession is accelerating a

shift in gender roles. More

than 5 million jobs have been

lost, 78% of them held by men.

That's led to the birth of the

term he-cession with many men

forced to reconsider their

career options. On the day

Larry got laid off from his

finance job, he and his wife watched 'Meet the Parents'

where Ben Stiller plays a male nurse. You know Greg's

nurse. You know Greg's in

medicine too. What field?

Nursing. I love it. I'm into

it. I'll do it. After being

laid off three times in eight

years, Larry is counting on

nursing where there's a severe

worker shortage as the source

of a steady gig. He's taken

lot of ribbing from the guys in

the neighbourhood. They're

calling him Larry Poppens. I don't care.

don't care. A job is a job.

There's nothing - female, male

t doesn't matter. It's work.

When Chuck lost his technology

job, he decided to become a

stay-at-home dad while his wife

Debbie runs her successful

marketing firm. There's

definitely old school thought

process on staying at home and

being a male where you're supposed to be the provider and

everything. With this recession

creating much higher unemployment rates among

unemployment rates among men

than women, many couples are

now engaged in wrenching

renegotiations over gender roles. There are studies that

show that when a man is laid

off he takes it harder than a

woman does. Absolutely and I

think even the most liberated,

feminist man still feels his

identity is threatened when he

loses his job. Women struggle

as well. Eleanor is not happy about being the main bread winner after

winner after her husband Rick

lost his job. I don't like

coming home and seeing him in

my apron. I wish I could say

something different but I've

lost so much respect for him.

I've got to get back to

work. Larry and his wife seem

to be taking the changes in stride. They think that this

recession, while painful, could

accelerate positive change. In

some ways you're on the

vanguard? Yeah, definitely. We're at

We're at the forefront, the

gender switch. Even when it's

over, this recession could

leave an indelible mark on

gender roles in America. Now

let's take a look at what's

making headlines around the

region. The Standard reports

two Chinese firms are take

advantage of improving market

sentiment and planning to

launch IPOs in Hong Kong.

'Financial Times' looks at US Federal Reserve chairman Ben Bernanke's

Bernanke's cautiously

optimistic remarks that the recession could end this year.

The Wall Street journal

examines Mr Bernanke's comments

that the recession is losing

steam. That's all for this

edition of 'Business Today'.

I'm Whitney Fitzsimmons. Thanks

for joining me. Enjoy your day.

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