Amanda Morrall details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news of a standstill among European leaders over the details of a masterplan to resolve Greek debt drama and stem threat of debt contagion.
Europe Union officials, gathered in Brussels for an emergency summit to address the EU's deepening debt crisis, were stymied yesterday in their attempts to quell the problem through consensus. (See Bloomberg article for more).
While leaders are reported to be in general agreement on a proposed 50% write down of Greek debt the devil is in the detail. Leaders remain at odds about how to structure the so-called masterplan.
Until they reach a consensus on how to structure their rescue remedy, they'll remain in gridlock.
Analysts say there are three key issues that need to be resolved: (ANZ economists summarise the situation here).
- Capital ratios for banks
- The voluntary aspect of the Greek haircut and
- The amount of the rescue-bail out fund - the European Financial Stability Fund.
This latest summit is the 14th in 21 months and is far from being the last given the current stand-off which threatens to draw Italy and France into debt contagion.
Markets and currencies had a mixed reaction to the impasse. With the exception of the FTSE European stock markets all ended the day on the a down note. (Bloomberg market report viewable here).
American markets responded more favourably to assurances from Mario Draghi, incoming head of the European Central Bank, that the bank would use "non-conventional measures" to prevent malfunctioning in the money and financial markets.'' (See Reuters story here for more details).
The Dow Jones, S&P 500 and Nasdaq all made gains overnight
It was good day for Gold as well, given its image as a safe haven. It rose 1.33% overnight closing at $1723 US an ounce.
Back home in New Zealand, Reserve Bank Governor Alan Bollard is set to announce this morning movements of the Official Cash Rate. It's widely expected to remain fixed at 2.5%
Bernard Hickey is in Wellington today and will report on the details this morning.
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(Updated with US market close and links)
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