Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that financial markets have celebrated suggestions that the European Central Bank (ECB) may 'go nuclear' in order to stop the contagion spreading through the European sovereign bond markets.
This would involve the ECB aggressively buying the sovereign bonds itself to push down yields and avoid the sort of debt spiral that forced Ireland to ask for a bailout.
The Dow rose more than 250 points and the S&P 500 rose 2.1%. This boosted appetites for riskier currencies such as the New Zealand dollar, which rose almost a full cent to around 75 USc in early trade.
Hope for a QE II-style intervention by the ECB was reinforced by comments from ECB President Jean Claude Trichet, who warned financial markets not to underestimate the determination of European authorities to defend the euro. This followed the spreading of the Irish bond crisis to Portugese, Spanish and finally Italian bonds. The euro also rose on the talk.
The ECB council meets tonight. Spanish and Italian bond yields dropped on hopes of a major ECB bond-buying move.
Good economic news from America, China and Britain also boosted sentiment.
Manufacturing surveys in China, the United States and the UK were better than expected and US jobs growth was also better than expected.
Finally, the US Federal Reserve has released details of which banks it bought toxic mortgage bonds off in the crisis of late 2008. It turns out European banks were the major beneficiaries of all the US Federal Reserve emergency cash.
Also, Australian economic growth in September was slightly weaker than most economists forecast.
(Updated with links and detail on euro, European bonds, Aussie GDP)
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