Here's my summary of the key news overnight in 90 seconds at 9 am, including news the eurphoria that boosted Asian stock markets 2% yesterday after pro-bailout parties appeared to win Greek elections faded within hours overnight.
Greece's pro-bailout New Democracy party, which has three days to form a coalition government, immediately asked for a softening of the bailout plans. But German Chancellor Angela Merkel just as quickly rejected the request, saying Greece needed to stick to its bailout agreement and any change would be 'unacceptable.' See more here at Reuters.
The euro fell and European banking stocks fell sharply, as much because there were fresh rises in Southern European bond yields on fears about slowing growth and the future of the Euro-zone and its banking system.
The Spanish 10 year bond yield rose to a euro-era record high close of 7.18%, having hit a high of 7.29%. See more here at Bloomberg.
The Italian 10 year bond yield rose to 6.08%, which is also seen as unsustainable in an economy with more than 2 trillion euros of debt.
Meanwhile, the leaders of the world's 20 largest economies are meeting in Los Cabos in Mexico. The Euro crisis is at the centre of discussions and expectations are growing about some sort of concerted action to ease the crisis. All the focus of financial markets will be on the US Federal Reserve's latest monetary policy decision on Wednesday night New Zealand time.
There were even calls for massive indiscriminate buying of Southern European bonds by the European Central Bank with printed money, although these suggestions are vehemently opposed by Germany. See more here at Bloomberg.
Meanwhile, the Euro fell to a two week low and oil prices fell 0.8% on fears about a slowing global economy. The Dow closed down 0.2%.
However, the New Zealand dollar remained firm over 79.3 USc as investor worries about a slowing economy were offset by expectations of fresh money printing in America and Europe, which would weaken their currencies relative to non-money printing economies such as Australia and New Zealand.
The New Zealand dollar rose to a two month high of 63 euro cents overnight. See more here in Mike Jones' currencies report.