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Good morning. Welcome to Business Today for Australia Network. I'm Whitney Fitzsimmons. Coming up on the program - confidence problem. Reports the entire board of the NBN has offered to resign. Strong vindication. German voters reward Angela Merkel for her leadership during the Eurozone crisis. And - clear signal. India's Central Bank chief raises interest rates signalling more could be on the way. Those stories coming up shortly, but first, let's take a quick look at the markets.

For more on the marketses I'm joined by Steve Daghlian from CommSec. How will Wall Street trade this week?Good morning, whit nee. Look, the US has really been in focus over the past Bank has been demanding a lost attention. Late last week we had the announcement that the tapering program won't actually had the announcement that commence and stimulus measures will continue as has been in place for quite a while. But on Friday, we had talk from James Bullard one of the Fed officials ses lengthsly saying if economic - essentially saying if economic news continues to improve, the tapering process could begin by as early as next month. This week, not a lot out in the US in terms of market-moving economic news but we'll hear from a few fed reserve fishes that will be key for markets generally.What can we expect to see in Europe?Europe has had a pretty busy start to the week. Earlier this morning we heard that Angela Merkel has won her third term. She has been in power since 200 5. The head of the Christian Democratic Union since the beginning of 2000. So that political certainty is probably a positive for markets and will broadly be in focus for the next couple of days. With very a German consumer confidence reading out over the next few days and the European Central Bank President Mario Draghi will deliver some talks to. Moving closer to home, where where markets take their from?Quite a bit of focus on China today A lot out locally in Australia in terms of economic or even company news expected. We have the latest reading early indicator of the health of China's manufacturing sector, later on today, so that's going to be certainly a driver for us. In particular, considering that over the past fortnight we've had promising readings from our largest trading partner. That will be important and later in the week we have profit results from David Jones, Kathmandu, ASX and New Farm. That will demand at least a level of attention.What's the latest on commodity markets?Commodity markets in general lost ground on Friday. Oil was mixed but the US oil price did fall quite significantly on Friday. Gold prices also slumped, so you're likely to see at least a bit of weakness coming through from a mining sector and it could be one of the worst performers today. And just before we go, how's the Australian dollar performing?Depends how far it
back we go and what we compare it to, but compared to say the end of the last week the Aussie dollar has lost quite a bit of ground against the greenback. We're sitting at approximately 93.9 US cents. Still certainly strong from a historical stand point,, but last week we hit highs of about 95.2. It's got a lot more to do with what we're seeing at the moment with the central bank in the US, rather than any sort of driver locally at this point. Steve, thanks for joining us.Thanks. Steve Daghlian from CommSec there. Now let's take a closer look at what's happening with currencies and commodities.

The entire board of the NBN mass reportedly offered to resign pay mid suggestions they don't have the confidence of the Abbott government. Fairfax Media says the resignations have yet to be accepted by Communications Minister Malcolm Turnbull. A decision will be made at a Cabinet meeting early next month. Mr Turnbull hinted in July after NBN Co Chief Executive Mike Quigley quit that he may sack board from the organisation responsible for the National Broadband Network. The coalition has blamed the board and executive team for massive cost blow-outs, timetable delays and for contractors losing money. German Chancellor was expected to secure victory in the country's general election, but the margin of her party's success has taken even surprise. Angela
her most ardent supporters by surprise. Angela Merkel's CDU Party is projected to have achieved well over 40% of the vote, a result she described as super. By Angela Merkel's standards, this is wild jubilation. The woman about to enter her third term as German Chancellor is otherwise known for her no-nonsense, almost downbeat approach, but it was a night to celebrate, with the Chancellor's Christian Democrats gaining more than 40% of the vote, more than even the polls had predicted.Dear friends, the cheers show we can all be happy, this is a super result. I would first of all like to thank the voters whoa have given the CDU such an outstanding amount of trust. And I can promise the voters that we will act responsibly and carefully with great. It is a great result. I and carefully with it.It's don't think we expected it to be as high don't think we be as high as that. There wasn't really much to toast at the the headquarters of Chancellor Merkel's current coalition partner the Free Democrats, who had their worst result in decades. That means Angela Merkel could seek a coalition with her main challenger.We did not register the result we wanted. Still, the situation is very unclear and that's why the SPD is well advised not to succumb to any speculations about what the formation of a government could look like. The ball is in Mrs Merkel's curt. She is the one who has to find a majority.

For the moment, Angela Merkel won't be drawn on her intentions.It's too early to say how we will proceed. We will discuss it all tomorrow at the party meeting, when we have the final results, but today, we should celebrate.

The message they were taking to heart in the Conservative south of the country. Where a general election didn't stop the Oktoberfest getting into full swing. In a dramatic fraul from grace, one-time Chinese political high-flier Bo Xillai has been sentenced to life imprisonment, the former party chief of Chong Ching has been found guilty of taking bribe, embezzlement and abuse of power. The court also ordered that awful his personal assets be seized.Sentencing him to a life under Chinese law is depriving him of all political rights for the rest of his life but there's one symbolic message here which is that his political life has ended. If he was sentenced to a certain number of years, well, that's sentencing him for a limited time, but for him, sentencing him to 20 years or life makes no difference. In a trial closely watched by those around the world, Bo denied all charges against him and is yet to lodge an appeal. It's an economic conundrum that's making life difficult in India. Growth is slowing at the same time the cost rising dramatically. Fixing one problem could make the other rising dramatically. problem could make worse, but India's Bank governor Raghuram Rajan has raised interest rates by a quarter of a has raised interest in an attempt quarter of in an attempt to reduce inflation. This man packs for a new life. Like thousands of other young Indians the law graduate is heading overseas to study. He will be doing his masters at Cambridge University in England. It's not cheap and it's even more expensive now that the Indian rupee sets the record low levels.It massed they things difficult. I've had to break my investments, I've had to sell some assets. I sold my car.The fuel of the rupee signifies a wider problem and that's a lack of confidence in the overall economy as the US economy recovers international investors are taking their money out of India.All of this has led to a sense of apprehension in the minds of people from India and those from overseas.Overall GDP growth has slowed to less than 5%, down from record highs of around 9% several years ago. Inflation is running pat more than 6%. For the average ijdzan the impact has been felt at the petrol pump and at the grocery store.Take the rupee depreciation, take the at least temporary higher price of oil, we have to see if the oil price reduction sticks. These are all issues which will factor in to inflation.India's new Reserve Bank chief Raghuram Rajan says he mass no magic wand to fix the economy and he has warned the public that tough measures are needed to get it back on track. Emerging markets have been urged to take advantage. Surprise decision to hold off tapering the US stimulus program. Turkey's Finance not to cut back its monthly bond buying has given e merging economies breathing bond buying has given economies breathing space to prepare for the end of loss monetary policies. Borrowers moved back into credit markets late last week in response. Bond prices have been hit hard in recent months by tapering fears. So what does the recent move by the federal reserve mean for emerging markets? Some analysts say that the decision to maintain the current stimulus program will be a positive, particularly for markets in Asia. To look more closely at this I'm joined by Roger Donnelly, chief economist with the Export Finance and Insurance Corporation. Welcome to the program.Good morning, thank you. So in your view, emerging markets have been suffering of late. What does the Fed's decision do for emerging markets? What impact will it have?I agree with the commentary you referred to just now, that it buys them time. It takes a bit of pressure from them to raise interest rates. If t gives them some opportunity to make some policy adjustments to attract capital back into their economies, particularly foreign they
investment, and I hope that they take advantage of that time to do those things. There's then a chance to stabilise growth. At the margin I think it's very helpful. When the Fed does decide to taper and there has been sort of comments that it could be as soon as next month, it appears that they will do so very slowly. So do you think that that will minimise any impact to emerging markets?Yes I think so. I think it's n accurate to call what's happened so far a crisis as some people have been saying. What we've been seeing is more a drag on growth rather than a brake. Indonesia and India are really seeing perhaps, you know, their growth rates being shaved by half a percentage point, going down in India's case from 5 to 4.5%. In Indonesia's case 6 to 5.5%. Things could get worse if the capital outflows accelerate there is time to turn things around. I think it has been a wake-up call to governments to do things, for instance, in Indonesia, India and Thailand. Governments are cutting back on their fuel and food subsidies. That have been very costly for the budgets. And I think that's winning approval from foreign investors. In fact as I mentioned before, India's Central Bank governor has moved to curb inflation. Do you think he needs to do more or is that adequate?I think around the region now, sen trat banks are becoming more active. They arguably overly engaged in loose monetary policy when markets. Now that it's ebbing capital was flowing into markets. out, they're actually being forced out, they're forced to become more out, they're actually being forced to become more pro
active and forced to become more active and get ahead of the
curve. That's forced to become more pro
active curve. That's a good thing.
active and get ahead of the
We've been talking about the

Fed tapering for quite some We've been talking about time. Why do you Fed tapering for time. Why do you think emerging
markets time. Why do you think markets or central banks around the regions haven't really been markets or central banks the putting in place poll the regions haven't really that would sort of stave off any that would sort any negative fallout from that? Is it just they weren't convinced that the Fed would be tapering or they weren't sure what to do?I guess when capital is ample, when the inflows are ample, there is a 10 den see to think that you can not make these difficult policy choices. When, however, the capital is flowing out, you're in a tighter corner and you're obliged to make those difficult choices. And I think as I think there is evidence that governments are now waking up and realising that they do need to be pro-active to stem the negative impact on their economy from these outflows. By and large the signals are pretty good. With respect to things like fuel subsidies, interest rate increases.What sorts of evidence are you is a seeing?Well, I referred to the food and about fuel subsidies before but also I think Indonesia has been taking steps to loosen controls on mineral or exports. During the period of easy money, it thought it had the luxury the exports, banning gas exports. I think that's been quite negative for foreign direct investment into their extractive sector. They're now easing up on some ever those restrictions and I think that's winning again approval from the director investors. These economies do need the patient capital that isn't so flighty and volatile in their economies to act as a bit of ballast that when the portfolio capital does leave the country you do have those stabilising inflows have of direct investment. Now, we of course have heard a lot about India and Indonesia in the scenario, but what are the other economic trouble spots around the region that you're seeing?Malaysia and Thailand, I think those four, Indonesia, Indonesia, Malaysia, Thailand are the four countries most affected. What about the Philippines?No, it's actually proving quite resilient. Why so?Well, Philippines for a number of years has been a bit of a quiet achiever. There are a lot of negative things you can say about the investment climate and security risks and so far, but leaving those things aside, the macro-economic stability is much higher now. They've won investment grade ratings from two of the ratings agencies. They don't have the large fiscal and external imbalances that have arisen in places like India. Has that been a concerted effort by the government?Yes,, yes. They actually weathered the Asian financial crisis in the late 90s and the global financial crisis quite well. They're proving quite resilient during this crisis as well. So a comparative success story. Are there lessons then that Indonesia, Thailand and India and Malaysia can take from the Philippines?I think there are, with respect to macro-economic management. To keep a close eye on fiscal policy, monetary policy and I think the Philippines is out performing those history economies at the moment. Roger Donnelly, thank you for joining us.Thank you very much. Central banks are not having an easy time with many economies around the world struggling to maintain growth and jobs. Two weeks ago, Indonesia's Central Bank finally did what many analysts had already foreshadowed, and downgraded the country's growth forecast to less than 6%. Indonesia for so many years a stellar performer is now feeling the pain of a trade balance that has slipped into the red, rising inflation and a weakening currency. It's one of Indonesia's most popular foods. Squares of tof ush and soy bean cakes called tempeh are eaten by millions every day. But lately customers have noticed that prices are up or the portions are getting smaller.It used to be 2,000 for three pieces. Now it's 1,000 for a mees.For a few days recently the supply of tempeh and tofu almost ran out. The producers because it The producers went on strike much to buy the because it was costing them too much to buy the soy beans to
make the much to buy make the dish.So make the dish.So the soy bean price is expensive. No price is expensive. production for three days, no tofu, no tempeh. I tofu, no tempeh. I didn't open my sop. It's in tens of thousands of small places like this that soy beans are process and made ready for market. But the issue of tofu is symptomatic of a new economic reality Indonesia finds itself in. Indonesians consume more than 2 million dons of soy beans a year but rely on imports to feed their appetites. As international prices go up, the cost to these home-style industries has become un affordable.If we open today, we wouldn't make ends meet for today. That's why we're doing this strike. For the government to see. Because the people's representatives are all asleep. Not long ago t used to cost around 75 c a kilogram for soy beans. Now it's almost a dollar. The real crunch came with the weakening of Indonesia's currency the rupiah which has been hit by sudden and fast falls. It's now stabiliseed a bit but had devalued by around 16%. And that weaker currency is making imports more expensive to buy.I mean I think that's an example of a core group of people crying out and apeej and needing to get attention from people crying out the government on something that they don't fully understand. that they don't understand. And that's that sudden ly over a limited period of time, the price of imported soy beans has gone up. But Nash ya's financial woes are not unique. It's one of several emerging economies hit by a move of foreign capital out of the country as the United States market starts to look a bit more promising. This is compounded by investors nervously eyeing Indonesia's large current account deficit but on street those concepts are little understood. Raising the price of a basic food by around 10 c may not seem like much, but for those on lower salaries it quickly adds up and that's the challenge for Indonesia, a large economy, a member of the G20, but still home to tens of millions whose salaries are low and jobs are precarious.It's a G20 country. It's a substantial force on the global stage. It's THE key force in ASEAN both from an positioning
economic size and political positioning standpoint and yet vast portions of its populace are still relatively impoverished so it's very sensitive to the swings of the global economy. Now the government's stepping in with some new presh measures. Trade officials are implementing a scheme that requires importers to buy a certain amount of the local soy bean crop at a set price. There's also a ceiling on how much tofu and tempeh producers pay for their raw material. Officials say steps like these from stop the price from fluctuating a key concern for small buyers.I am confused. If we open, we don't get profit. If we don't open, we suffer. The only hope is that the soy bean price becomes standard and doesn't fluctuate. This kind of been
government intervention has been seen before when an economy is faced with a slowdown.We see that in the form of the Trade Ministery trying to balance between protectionist policies that appeal on the one hand to part of the electorate and the very real risk that price inflation will result. As a result of narrowing of the supply chain. What seems likely is that going What seems likely is that it's shift going to be an uncomfortable
shift for been riding high. An emerging shift for a country which had been riding market darling which felt been riding high. An assured market darling which assured of its paths. The Western Australian opposition has called on government Western rethink Future Fund in light of the State losing its triple A credit rating. The fund was established last year to preserve WA's wealth for future generations. But Labor says it's a bad investment that will end up losing millions of taxpayer dollars. The Future Fund was the centrepiece of last year's State Budget. Money from the mining boom was to help build a $4.7 billion pot of cash for future generations. But Labor says it's a bad investment that just got worse after the State lost its triple A credit rating last week.The reality is that we're borrowing on the credit card to stick in a savings account. Each year the Future Fund loses mun heap.More than a billion dollars of Royalties for Regions money is being used as seed capital for the fund. After 2016, 1% of mining royalty also go into Future Fund every year. The opposition says at a time when the government is making cuts to education, it doesn't make sense to borrow money at a higher rate to keep the Future Fund going only to make a loss. The Treasurer was unavailable to respond. As for the premier, his problems show no sign of abaiting and perhaps getting worse. He was quoted as saying today that it's an issue for the Liberal Party that there's no obvious successor to him. A comment unlikely to please colleagues who already have axes to grind. The opposition says it's a slapdown for Troy Buswell who still harbours leadership ambitions.The Liberal Party's openly talking about changing leaders. And Mr Barnett's saying no-one else is as good at this job as I am. The premier says he will make up his mind about cop testing the 2017 election, 6 to 12 months out from other business months out from the poll. other business news, shares in Smartphone maker Blackberry have dropped 17%. It follows confirmation that Blackberry is planning to cut 4,500 jobs worldwide or 40% of its global work force. Blackberry says it expected a lot of around a billion dollars when it reports its second quarter earnings later this week. The company said it's taking the difficult but necessary steps in a more competitive industry. And structural remoral will be high on the economic agenda when APEC leaders meet in Indonesia next month. APEC Finance Ministers gathered at Bali at the week tonds discuss ways of boosting growth. Indonesia's Finance Minister singled out volatile capital inflows and high unemployment as two major issues for the region. And now let's look at what's making headlines around the region. The 'Wall Street Journal' reports that conditions in Cambodia's garments factories are under the spotlight with safety, compliance and workers' rights in focus. And the Hong Kong standard says Chinese consumers have turned their backs on moon cakes and banquets, prefering to spend their money on daily necessities. That's all for this edition of Business Today. For more information on the program, please check out our web site or you can see Business Today on catch-up at the Australia Network site. If you have any comments you can gind me on Twitter. Tas for joining me. Enjoy your day.

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This morning - an Australian among the dead as two-day siege between Kenya's Army and Islamic between Kenya's Army Islamic militants continues in Nairobi.

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The Federal Government to unveil its border protection policy, limiting its alerts on asylum boat arrivals. A Perth court set to rule whether Lloyd Rayney will face a retrial for his wife's murder. And after a big weekend, the finals action, the AFL gears up to crown its best and fairest.

Good morning. You're watching ABC News 24. Also on the Australia network across Asia and the South Pacific. I'm Taguchi ta. Let's take a - Kumi Taguchi. Let's take a quick look at the capital cities around the nation today.