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90 seconds at 9 am: Risk aversion to fore; Spanish debt worry; Australian trade deficit; Chinese bank reform; US$ gains
Here's our summary of the key news overnight in 90 seconds at 9 am, including news that yesterday's shift in sentiment to risk aversion has continued in global markets overnight. The Dow is down sharply, as is the oil price, and both precious metals and semi-precious metals have taken a sharp tumble.
A surge in borrowing costs for Spain overnight unsettled financial markets and showed that even if the European debt crisis was in remission, it was not cured.
A decision by the European Central Bank on Wednesday to leave its main interest rate unchanged also reflected concerns about the broader euro zone, where the economy was sputtering and credit was still tight.
That Spanish bond auction was notable because there were far fewer local buyers than recently; the foreign buyers had long since departed. But if the locals are also shunning Spanish government bonds, that only leaves the ECB. And that may help explain why the head of the ECB was tight-lipped following his rate decision.
In Australia, they have announced an unexpected trade deficit again, this time on lower coal exports.
The Chinese news is all about reforming the huge 'dinosaur' State banks - a mammoth task but one they seem to be focussing on.
In the US, the latest employment report there confirms that March payroll growth was very positive; ADP reported growth of 209,000 new jobs in the month. There was also news that the standard survey of service industry health maintained its very strong reading despite a small slip.
All this news helped push the US dollar higher and the NZ dollar opens this morning at US0.8140.