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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