Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news that US and European stocks fell more than 3% on Friday night as fears grow that Greece is about to default on its sovereign debts and unleash more mayhem inside the European financial system.
The Greek 1 year government bond yield rose to 98% and markets were pricing in a 90% chance of a Greek default.
Germany appears to have decided not to provide another bailout for Greece and is now preparing to bail out its own banks, who are expected to have to book big losses on Greek bonds and other Greek assets if a formal default is declared. See more here at Bloomberg.
Germany's Finance Minister threatened to withhold a bailout payment. Greece's Prime Minister pledged to avoid default, but the Greek economy continues to contract, making it much harder for Greece to dig itself out from under the debt.
Greek GDP fell 7.3% in the first quarter from a year ago and is expected to contract a full 5% this year. See more here at Bloomberg.
European bank stocks slumped and European stocks fell 3.7% overall. See more here at Bloomberg.
French banks are now expected to be downgraded by Moody's, Bloomberg reported.
The surprise resignation of European Central Bank (ECB) Chief Economist Juergen Stark on Friday also unnerved markets. See more here at Reuters.
Stark resigned in protest at the European Central Bank's wholesale buying of Italian and Spanish bonds to bolster the Eurozone. See more here in my explainer on the European crisis.
US stocks fell almost 3% and bank stocks were particularly weak.
All this fresh turmoil on global markets saw investors take risk off the table. That drove the New Zealand dollar down to 82 USc from over 83 USc earlier on Friday.
Markets are also looking ahead to the Reserve Bank of New Zealand's decision on interest rates on Thursday morning at 9 am. Most expect the RBNZ to hold at 2.5%. See more here in our preview.