Obama addresses Federal Parliament: Midday Roundup

US President Barack Obama has praised the decades-long relationship between the United States and Australia in a speech to Federal Parliament, also flagging cuts to defence spending in his country.

Obama, who is the fourth US President to address Parliament, praised the ANZUS alliance and noted the recent announcement to establish a US base in Darwin.

“As the world’s fastest-growing region – and home to more than half the global economy – Asia is critical to achieving my highest priority: creating jobs and opportunity for the American people,” he said.

“As President, I’ve therefore made a deliberate and strategic decision – as a Pacific nation, the United States will play a larger and long-term role in shaping this region and its future, by upholding core principles and in close partnership with allies and friends.”

Obama noted that the US will reduce defence spending as it winds down the war in Afghanistan.

“As we end today’s wars, I have directed my national security team to make our presence and missions in the Asia Pacific a top priority.”

“As a result, reductions in US defence spending will not – I repeat, will not – come at the expense of the Asia Pacific.”

Shares flat after weak US leads, Australian dollar tumbles on Fitch US bank warning

The Australian sharemarket has opened flat today after a weak lead in the United States, where investors are still cautious due to the ongoing debt situation in Europe.

The benchmark S&P/ASX200 index was down 4.9 points or 0.1% to 4242.5 at 12.00 AEST, while the Australian dollar rose to $US1.01c.

AMP shares rose 0.46% to $4.34, while Commonwealth Bank shares fell 0.14% to $48.56. Westpac shares rose 0.78% to $20.79 as NAB fell 1.1% to $24.34.

In the United States, the Dow Jones Industrial Average fell 1.6% to 11,905.6.

But the Australian dollar has not fared well, falling near parity this morning after Fitch ratings agency said US banks faced a serious risk to their creditworthiness should the European debt crisis take a turn for the worse.

RBA keen on managing risk: Stevens

Reserve Bank governor Glenn Stevens has said at an internal auditing forum in Sydney that the RBA is keener on managing risk due to financial volatility.

“There have been many practices exposed in global financial institutions over the past few years that show poor risk management and failure of controls over lending and trading activities,” Stevens said.

“The fact that these issues continue to surface is a clear indication that the subject matter of today’s forum remains relevant.”

“There are few signs that the additional focus is going to lessen any time soon. If anything, it will increase,” he said.

James Hardie returns to profit

Building products maker James Hardie has returned to profit during the first half of the 2012 financial year, and has confirmed its full year guidance.

The company said its US residential and construction market is still weak, while consumer confidence in Australia and New Zealand has also been subdued.

The company recorded a net profit of $US128.4 million in the six months to September 30, up from a $US318.8 million loss in the previous corresponding period.

“The Asia Pacific businesses, though challenged by a weaker operating environment, particularly in Australia and New Zealand, continue to perform well, with solid gains in both category and market shares across the region,” chief executive Louis Gries said in a statement.