Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news US stocks and the New Zealand dollar fell overnight as doubts emerged that Europe could find a solution to its sovereign debt crisis at a summit this weekend.
A spokesman for German Chancellor Angela Merkel said the crisis was unlikely to be solved at this weekend's summit of European leaders in Brussels and could extend well into next year, dashing the hopes of many built up over the last 10 days that Europe was determined to save the Eurozone.
"Dreams that are taking hold again now that with this package everything will be solved and everything will be over on Monday won’t be able to be fulfilled,” Steffen Seibert, Merkel’s chief spokesman, said at a briefing in Berlin, Bloomberg reported. The search for an end to the crisis “surely extends well into next year," he said.
There remain disputes over the size of the haircut on Greek debt that European banks will take and who will pay for both an expanded European rescue fund and the recapitalisation of European banks. Bloomberg reports Deutsche Bank's CEO Josef Ackermann saying he did not want a big Greek haircut and other bankers have said they would rather reduce lending than accept capital they did not want from governments or shareholders.
Reuters reported German Finance Minister Wolfgang Schauble said a 5 point plan to be delivered to this weekend's meeting was not a "definitive solution."
The German downplaying of expectations followed a G20 Finance Minister's meeting in Paris over the weekend which spelt out clearly that Europe needed to find a solution this coming weekend that would be presented to a full G20 leaders meeting on November 3/4 in Cannes.
US stock markets had rallied more than 10% in the preceding 10 days on hopes Europe might find a way through.
Spreads between Portugese, Spanish and French bond yields rose to near record levels overnight on fear contagion may not be contained if Greece defaults. See more on markets overnight here at Bloomberg.
US stocks also fell after Wells Fargo reported a weak profit result and the New York Federal Reserve published its index of economic activity showing weaker than expected activity.
Elswhere, the Occupy Wall Street protests continued to spread overnight, with Police blocking access routes to the London Stock Exchange (LSE) and Italian police raiding protesters premises looking for weapons, Bloomberg reported.
The New Zealand dollar fell back to 79.3 USc from over 80 USc yesterday as commodity prices fell in line with expectations of global growth.
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