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90 seconds at 9 am: Markets buffeted on sharpening Greek uncertainty; exit now being planned; commodities fall sharply; Australia to be affected; NZ Budget
Bernard Hickey is in Wellington today covering the 2012/13 Budget announcements. Here's my summary of the key news overnight in 90 seconds at 9 am, including news that equity markets fell from Asia to New York, and the euro tumbled to near a two-year low as investors focused on contingency plans for a potential Greek exit from the euro zone.
EU leaders are gathering in Brussels for an ironically-called "growth summit" as the German central bank said a Greek exit from the euro would be "manageable" - even while Greece denied that eurozone leaders were told to prepare for the eventuality.
Commodities are falling as a general gloom settles over world markets. US oil dipped below US$90/barrel, pushed lower on reports of large US inventories. Brent crude fell 2.2% to US$106/barrel. Gold fell very sharply and at one stage was as low as US$1,533/ounce, although it has clawed back some of that fall - but it is showing that it now behaves just like any other commodity. It is not acting like a store-of-value or a safe-haven these days. It is US Treasuries that have taken on that role - overnight, the US Treasury auctioned 5-year Notes at a record low yield of 0.748%
In the US, new home sales rose. Sales were up and better than expected in almost all regions of the country. The median price rose to US$235,700, an increase from March. This positive US home sales data comes after yesterday's positive data for existing home sales.
But that was one of the few bright spots overnight. Closer to home, the World Bank is warning that slowing growth in China will flow on to weakening demand for Australian minerals. And the big miners are having trouble controlling their costs on existing projects, just as demand looks like it is slowing.
In Wellington today, Bill English will announce the 2012/13 Government budget - one released when there are very strong stresses on both the revenue and cost side. Bernard Hickey and Alex Tarrant will be in the Treasury lockup so that we can bring you the key budget news as soon as it is released publically at about 2pm this afternoon.