Australia and New Zealand are good mates and always will be. We share a history of brothers-in-arms in war and we laugh at the way they say 'fersh and cherps". But there is another major difference - while we have been riding high on the demand for our resources from China and India, the Kiwis have been weighed down by high debt and yesterday's earthquake is only going to make matters worse.
Apart from the move in debt markets, the country's currency was hit hard, falling to US75.05c, from US76.04 yesterday. This earthquake could be much worse than last year's quake, which cost an estimated $US3.8 billion in repairs.
Moody's has a Aaa rating on the country with a stable outlook and Fitch has an AA+ rating. Fitch's head of Asia Pacific sovereign debt Andrew Colquhoun said "The ratings are on negative outlook already, which is driven by that economy's imbalances."