Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that US and European stock markets surged overnight on hopes for a US stimulus plan and relief that Germany can go ahead with its Greek bailout -- for now.
The German constitutional court ruled that Germany's bailout plan for Greece was valid, but that any changes in future would have to be approved by the German parliament. There were some fears that the court could block the bailout altogether. See more here on the court ruling from BBC.
European stocks rallied 3% to 4% and the gold price fell as fear about an immediate European financial catastrophe receded for a few hours. See my Explainer on what the Euro crisis means for New Zealand here.
Meanwhile, hopes that US President Barack Obama might present a substantial jobs stimulus plan for America helped boost US stocks around 2.5% overnight.
Various leaks suggested Obama would announce a US$300 billion stimulus package to Congress around 11am on Friday New Zealand time.
Obama is expected to announce an extension of payroll tax cuts, some extra infrastructure spending and some spending on local and state governments. However, the White House has ruled out breaching the debt ceiling set last month.
See more here on the plan at Reuters.
US stocks also rose after Yahoo sacked its CEO. See more here o n US markets at Blooomberg.
The New Zealand dollar also rose vs the US dollar, as it often does when the US stock market rose. Appetites for riskier assets globally rose in line with the strong US stock markets.
The New Zealand dollar rose back over 83 USc, but remains weak vs the Australian dollar.
Australian GDP figures were stronger than expected yesterday and Reserve Bank Governor Glenn Stevens said Australia's cash rate of 4.75% would remain on hold because of the European financial turmoil. This softened expectations that the next Australian move would be a cut the rate, which is currently set at 4.75% and compares favourably with New Zealand's 2.5%.
The New Zealand dollar fell to 78 Aussie cents and has been up around 80 cents as recently as Friday. There had been expectations Australia would cut its rate as New Zealand raised its rate, which would make the NZ dollar relatively more attractive. But these doubts about the Australian rate hike are reducing that relative attractiveness.
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17 Comments
Surge and hope...the German Court decision demands the German Parliament ok any future govt agreements to bailout piigs...that's not an end to the problem....the piigs debts remain.
Obama is to lay down the rules to the media anchors at a Whitehouse feed before his big speech...they will be told it'll be their fault if the $300billion of juice fails...what a load of BS.
And punters are expected to believe the bear markets have turned into a bull...what a load of bull.
German ruling party will still require the numbers to proceed with future bailouts Wolly...that may be about to become difficult...as back door political deals go into full swing mode.
the latest.........http://www.telegraph.co.uk/finance/financialcrisis/8748393/German-court-curbs-future-bail-outs-bans-EU-fiscal-union.html
Greek 1 yr yield has reached 97%....I'm going to buy some as soon as it goes over 100%...long as they pay me the return at the start of the loan...Gummy will have some too.
"Niger's foreign minister says his country's border with Libya cannot be closed to prevent fugitive Libyan leader Muammar Gaddafi fleeing south" bbc
at least not until all the slob's gold has crossed over.
Note: expect to see Niger govt gobshites driving Rolls in the very near future and a shortage of skilled mudhut builders to cope with the demand for mansions and other rubbish.
Can't tell if you're trying to say perhaps you prefer the Al Quieda (rebels) working for the NATO owned bankers to have the gold etc Wolly, can you clarify?
Bernard your eyes are shut again, no offense intended but its not a good look.
It demonstrates sincerity during clairvoyance...Andrew......would you prefer a wig and tarot matt.
safer than living with crystal balls. :)
AJ : I think it's because he had to report lots of good news from overnight ...
... as one of the high priests of financial darkness , Bernard gets blinded by the light .
3 of the 6 posts by Wolly, so better do one least Wolly is just speaking to himself.
Think it is becoming obvious that the powers that be are not going to allow the economic stuation to crash, it will be muddling along as usual in Europe and USA. In NZ we are about to have our moment in history, never again will NZ be able to put on something equvalent to the 2011 RWC - so enjoy the experience while one can.
jeez thanks me...that was hard work.
Do not expose your gold filling when in the usa...no smiling!
"The gold fever that has driven prices to an all-time high is also fuelling a crime spree in the precious metal. Police nationwide are seeing an uptick in robberies and burglaries related to gold prices, which peaked at US$1,891 an ounce last month, up more than US$600 from a year earlier.
The FBI doesn't keep numbers for gold thefts but local police departments have plenty of anecdotal evidence of a spike. Dozens of women have had their necklaces snatched in daylight attacks, burglars are targeting gold in homes and robbers in New Jersey even cleared out a mining museum's irreplaceable collection of nuggets." herald
Another 2 postings to none, I'll play
Im amazed that at the slightest hint of "stability" or something "positive" so many ppl rush back in yet its all smoke, mirrors and shadows. It just strikes me as desperation and that anyone sane should have bailed long ago.....wierd....
regards
"Govt 'won't trial' medicinal cannabis" stuff.co
Which is sad really because I think a little pot might go a long way to giving us a better govt.
.... did a little " pot " give us a better Greens Party , Wolly ?
Oh come on Gummy....you gotta admit the govt needs some medicine...hey that's cool dude..."Better Green"...
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