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 financial markets are beginning to worry again about the US deficit situation.
A 'Super-committee' of Congress is due to come up with a package of US$1.2 trillion worth of cuts by the end of Wednesday, but the signs over the weekend were that Republicans and Democrats on the committee could not agree to a plan.
The Super-committee was formed back in August when the American government failed to raise its debt ceiling, causing Standard and Poor's to downgrade America's credit rating to AA+ from AAA.
If a plan cannot be agreed, US$1.2 trillion worth of cuts (about 8% of GDP) automatically kick in across-the-board from 2013, which could drive the US economy back into recession. Military spending would be hardest hit. There are also concerns that America's credit rating may come under further pressure. See more here at Reuters.
Meanwhile the European crisis is rolling on with Greek politicians in Brussels to argue for the next tranche of their bailout, although not all of them are willing to sign up to pledges to carry out austerity measures. See more here at Reuters.
Spanish voters are also expected to turf out their existing left-leaning government for a centre-right opposition as public discontent grows over the Euro crisis and chronically high youth unemployment. See more here at Reuters.
There remain concerns in Europe about very high government bond yields in Spain and Italy, and the potential for fears about stability of the European financial system spreading to money market funds in America. See more here at Reuters.
The New Zealand dollar was weak around 75.6 USc this morning as fears about European contagion drag on expectations for the global economy, commodity prices and 'riskier' currencies such as the New Zealand and Australian dollars. See more here in BNZ's currencies report on our site.
Meanwhile, New Zealand faces its own general election this weekend. See all our news coverage here.
See our political reporter Alex Tarrant's live blog here.
See our Election 2011 policy comparisons pages here.
(Updated with links to election coverage)
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