European and US stocks surge on Euro rescue hopes; OECD cuts global growth forecasts; NZ$ up to 75.5 USc
Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that European and US stocks surged 3-5% on hopes European leaders might find a way to stop the European Sovereign debt crisis spiraling out of control.
See more at Bloomberg on stock market rises.
Germany and France are preparing to propose fast-track moves for a Eurozone wide fiscal union to go with the euro zone's monetary policy union. This, in theory, would avoid the need for changes to the European Union treaty, which would require referendums in many countries. See more here at BBC.
In theory, this fiscal union would allow the European Central Bank to step in to buy distressed European sovereign debt.
Also, there is talk the European Financial Stability Fund would guarantee losses on 20-30% of European bonds, which European officials hope would restore confidence in the market. See more here at Bloomberg.
However, Europe is far from out of the woods.
The OECD warned overnight the Eurozone and the UK were falling rapidly into a recession and it downgraded its forecasts for global growth to 3.4% from 3.8%.
It also warned that an Italian or Spanish default on sovereign debt could cause a global contraction. See more here at BBC.
The New Zealand dollar rose to over 75.3 USc overnight as investors bet again on riskier assets and riskier currencies, particularly those exposed to commodity prices such as the New Zealand dollar.
No chart with that title exists.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.