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90 seconds at 9 am: Spain says only wants bailout without harsh conditions, raising new Euro-zone fears; Stock rally stalls; NZ$ becalmed at 81.5 USc
Here's my summary of the key news overnight in 90 seconds at 9 am, including news Spain appears reluctant to ask for a bailout if it involves harsh new austerity conditions, raising fears the European Central Bank (ECB) will not get the necessary green light to buy Spanish bonds to calm the Euro-zone crisis.
Global stocks, commodities and Southern European bonds have rallied sharply in the last week on hopes ECB bond buying may calm the Euro-zone crisis, so the suggestion that Spain may not want or get a bailout from European rescue funds undermines those hopes.
The ECB has said it will only buy Spanish bonds in conjuction with a rescue coordinated by the European Financial Stability Fund after a Spanish request for a bailout. See more here at AFP.
The Euro fell and European stocks fell around 0.3%. US stocks closed broadly flat in a lightly traded market dominated by Northern Hemisphere holidays and Olympics-watching. See more here at Reuters.
Meanwhile Germany bund yields fell after news German industrial production fell 0.9% and German exports fell 1.5%, suggesting the Euro-zone economic slowdown is gathering pace. Spanish long term bond yields rose. See more here at Bloomberg.
In Britain, the Bank of England slashed its economic growth forecast and cut its inflation view, opening up the possibility of yet more money printing to try to boost the British economy.
The Bank of England's Governor Mervyn King warned the impact of the Euro-zone economic slowdown was worse than expected and he lamented the pound's rise vs the euro despite the money printing, saying it was hurting exporters. See more here at Bloomberg.
The New Zealand dollar was broadly stable at 81.5 USc, with markets looking ahead to labour force figures at 10.45 am expected to show unemployment down slightly to 6.5% and modest employment growth.