Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that Europe's banking system continues to suffer enormous stress on fears a Greek default could unleash a contagion of bank losses across Europe.
European stocks closed down 2.5% and German stocks fell 3% on concern that European politicians remain divided about how to deal with Greece and the ensuing fallout within the banking system. See more here at Bloomberg.
Greece's latest bailout tranche was delayed again yesterday after it failed to meet deficit forecasts and Germany's Finance Minister continued to rubbish plans for a leveraged up 'bazooka' bailout fund to build a firewall around Greece.
However news in the last half hour of New York trade from the FT that European ministers were looking at a bank recapitalisation plan boosted stocks in late trade.
The Dow closed up 1.4% and the S&P 500 closed up 2.5%, having earlier fallen as much as 2.5% when the video was being recorded. See more here at Bloomberg.
After the US close Moody's downgraded Italy's sovereign credit rating by a stunning 3 notches. See more here at Bloomberg.
Shares in Belgium's Dexia Bank crashed a further 33% overnight after the Belgian government pledged to support it, which investors feared meant some form of nationlisation that would dilute their holdings. See more here from Bloomberg on signs of growing stress in Europe's banking system.
Germany's Deutsche Bank also announced it had abandoned its previous profit forecasts. See more here at NYTimes.
Goldman Sachs cut its global growth forecasts and not even comments from US Federal Reserve Chairman Ben Bernanke that he was prepared to act as the economy was close to faltering was enough to lift the gloomy mood on Wall St. See more here at BBC on Bernanke's comments.
Meanwhile, the Australian dollar fell vs the US dollar after the Reserve Bank of Australia held rates and indicated an easing bias. Many now expect the Reserve Bank across the Tasman to cut its official rate on the first Tuesday in November, which is also Melbourne Cup day. See more here at SMH.com.
All this volatility and concern about the global economy and commodity prices saw the New Zealand dollar fall under 75 USc overnight. It often moves in tandem with commodity prices. See more here in BNZ's currencies report on our site.
Milk powder prices fell a further 1.8% in Fonterra's fortnightly auction overnight. See more here.
The New Zealand dollar rebounded to over 76 USc in early morning trade as the Dow bounced sharply, although it has come off its highs after Moody's downgraded Italy's credit rating by three notches.
(Updated with sharp rebound in last half hour of New York Trade, NZ$'s jump back to 76 USc, 3 notch downgrade of Italy by Moody's after the close, links)
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