90 seconds at 9am: Markets stage relief rally on European 'shock and awe'
11th May 10, 9:09am
Bernard Hickey details the key news overnight in 90 seconds at 9am in association with the BNZ, including news markets rallied globally overnight on relief that Europe had unveiled a 'shock and awe' plan to rescue European nations that are struggling to borrow. Eurozone finance ministers announced the creation of a 750 bilion euro stabilisation fund and the European Central Bank has promised to buy back bonds. The Dow rose more than 3%, European stock markets rose as much as 10% and the euro bounced back strongly. Bond prices rose, which meant yields fell. Markets are relieved that the immediate prospect of a financial meltdown in Europe has receded. Meanwhile, the New Zealand dollar rose against the US dollar. It tends to strengthen when markets are less nervous about risky assets. However, it fell against a stronger euro and is firm against the Australian dollar on expectations of rising interest rates here.