90 seconds at 9am: Euro doubts return; Australian surplus soon; Cameron is British PM
12th May 10, 8:44am
Bernard Hickey details the key news overnight in 90 seconds at 9am in association with BNZ, including news the relief rally that folllowed Europe's 'shock and awe' plan to save the euro has ended. Doubts have returned about Europe's ability to deal with a mountain of debt. Many worry that adding more debt to the mountain won't solve the problem. Even the European Central Bank has warned the measures are only temporary and long term measures to reduce budget deficits and control debt are needed. The euro fell and the Dow was flat. Meanwhile, Australia unveiled its budget overnight and forecast a surplus within 2 years. New Zealand's current forecast is for another 6 years of deficits, although we'll see in the budget next Thursday whether it will actually be sooner. In China, inflation hit an 18 month high, raising new fears the authorities there will have to slow the economy to stop it overheating. China's growth is now crucial for the Australian and New Zealand economies. In Britain, Tory leader David Cameron is now Prime Minister after Labour leader Gordon Brown resigned. Cameron now has to do a coalition deal with the Liberal Democrats, but the reduced uncertainty buoyed the pound. The New Zealand dollar fell slightly against the pound to 48.1p from 48.5p earlier this morning.