Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news of turmoil on global financial markets as Greece teetered on the brink of a sovereign debt default that could trigger a contagion of heavy losses across Europe's banking system.
Greece's government was on the verge of collapse this morning as the Prime Minister George Papandreou offered to quit to form a unity government to agree austerity measures needed for a fresh bailout. But the offer has stalled amid violent clashes involving more than 20,000 protestors and police outside the parliament. See more here from Reuters.
Meanwhile the European Central Bank is warning of chaos on financial markets if Greece is allowed to default on its debt, which ratings agencies have said it would if its debt is extended or there are any haircuts imposed on creditors. German officials are arguing for a 'soft restructuring', but are opposed by the ECB which holds much of the debt and may itself be rendered insolvent by a default. See more here at Bloomberg.
European finance ministers failed to agree overnight on a plan for a fresh Greek bailout, delaying any solution until July. Any bailout is also dependent on Greece agreeing to 28 billion euros worth of tax hikes, spending cuts and asset sales.
Moody's put French banks BNP Paribas, Societe Generale and Credit Agricole on review for downgrade because of their exposure to the Greek crisis. See more here at Reuters.
Fears about a cascading series of defaults across Europe's sovereign debt and banking system drove European bond yields sharply higher and slammed the euro and pound. The US dollar and gold rallied as investors sought safe haven in US Treasuries.
The NYMEX oil futures price fell as much as 5% to US$95 a barrel on fears about the global economic outlook and the S&P 500 fell as much as 2%. See more here from Bloomberg on the global stocks rout and the fall in the oil price and the rally on US Treasury markets and the rise in the gold price.
The New Zealand dollar fell sharply to around 80.4 USc in early trade as global investors exited currencies and commodity trades seen as 'risky'. This is described as the 'risk off' trade.
More soon with video.
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